FISCAL NOTE
Date Requested: January 11, 2018
Time Requested: 10:20 AM |
| Agency: |
Municipal Pensions Oversight Board |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1138 |
Introduced |
SB98 |
|
|---|
| CBD Subject: |
Counties, Municipalities |
|---|
|
FUND(S):
53 individual muncipal funds
Sources of Revenue:
Other Fund NA
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The bill would increase the State's responsibility to pay twenty percent of a municipal required contribution to its municipal policemen's and its municipal firemen's pension and relief fund. For FY2018, the twenty percent figure would be $9.6 million of the $48.2 million due from municipalities. Conservatively, this figure would be an additional $9.6 million per year for the next 10 years, or a minimum of $96.3 million total. The likelihood of the annual figure of $9.6 million remaining stagnant is unlikely. The most prudent estimate would show increases in the required municipal contributions over the next ten years.
Also, the funding source for the State is not determined in the bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
9,634,971 |
9,634,971 |
9,634,971 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
9,634,971 |
9,634,971 |
9,634,971 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The FY2018 municipal contributions to municipal policemen's and municipal firemen's pension and relief funds is $48,174,856 according to the latest actuarial consolidated report from GRS Consulting, which is the actuary on contract performing actuarial studies for each of the 53 municipal policemen's and firemen's pension plans in WV. Assuming each municipality consolidates with another local government and becomes eligible for the twenty percent State match the State would become responsible for annually for the ten year period. The FY2018 municipal contribution figure will likely increase in future years due to actuarial assumption changes which are required to be reviewed at least once every five years.
There is not a revenue source identified in the bill, thus the estimated total revenue is zero for all years.
Memorandum
The bill does not identify the source of funds that would be available to pay municipalities which successfully complete municipal consolidation. The bill simply states the State would provide a matching payment from the State in the amount of twenty percent of the annual municipal actuarial contribution to the benefit fund created in ยง8-22-1 et seq for a period of ten years following the consolidation.
This begs the question, would the state match be in addition to municipal contributions or to replace 20% of municipal contribution. The majority of existing municipal policemen's and municipal firemen's pension plans in WV are very poorly funded and need as much funding each year as possible.
Person submitting Fiscal Note: Blair M. Taylor
Email Address: blair.m.taylor@wv.gov