FISCAL NOTE
Date Requested: February 18, 2019
Time Requested: 11:50 AM |
| Agency: |
Rehabilitation Services, WV Division of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3314 |
Introduced |
SB659 |
|
|---|
| CBD Subject: |
Human Services |
|---|
|
FUND(S):
Appropriated
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Creates New Expense, Creates New Fund: Employment First
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Note that this PARTIAL Fiscal Note highlights the projected costs to the WV Division of Rehabilitation Services (DRS) following the passage of SB 659. Additional costs to other agencies and contributors to the proposed taskforce (e.g., rate increases for service providers, loss of sales tax revenue from Sheltered Workshop product/service sales, loss of income tax for Sheltered Workshop employees without disabilities, property taxes, etc.) cannot be ascertained by DRS at this time. Furthermore, the Legislature currently provides approximately $1.8 million in Workshop Development funds that may be effected by SB 659.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
928,000 |
928,000 |
928,000 |
| Personal Services |
150,000 |
150,000 |
150,000 |
| Current Expenses |
778,000 |
778,000 |
778,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
-32,947 |
-32,947 |
-32,947 |
Explanation of above estimates (including long-range effect):
The purpose of SB 659, in part, is to provide for fair pay and maximized employment of disabled persons; create a state “Employment First” policy that encourages agencies to facilitate employment of disabled persons; and remove current exemption for paying minimum wages to persons in nonprofit workshops. To this end, DRS is already conducting activities of this nature in its mission to enable and empower individuals with disabilities to work and to live independently by providing individualized services to consumers and employers, consistent with consumers’ informed choice. DRS provides services to individuals seeking competitive, integrated employment and does not place individuals with disabilities into subminimum wage employment or sheltered workshop settings.
DRS uses an “Employment First” approach with consumers, actively moving with them toward a goal of competitive, integrated employment, consistent with consumers’ informed choice. Likewise, DRS is in compliance with the Workforce Innovation and Opportunity Act (WIOA) regarding efforts to minimize Sheltered Workshop employment for individuals with disabilities by providing the individuals employed at such Workshops with information regarding competitive, integrated employment and vocational rehabilitation (VR) services. DRS conducts information sessions at such Workshops on a semi-annual basis.
As of July 2018, 264 individuals with disabilities were employed at Sheltered Workshops in the State of West Virginia. DRS estimates that the cost of providing VR services, including training and on-the-job supports, to these individuals until all of them achieved the goal of competitive integrated employment would be approximately $2.64 million over the course of approximately 5 years, assuming a cost of $10,000 in services to each of these individuals. Because of this potential shift in allocation of funds, DRS would be unable to serve other individuals that the agency would have been able to otherwise serve, without additional State funds to cover the costs. Further costs would be incurred by other agencies to provide these individuals with long-term on-the-job supports after the services provided by DRS have ended.
To establish and carry out the requirements of the taskforce set forth in SB 659, for the purpose of developing recommendations on implementation of an Employment First Policy and providing related reports to the Governor and Legislature on an annual basis, DRS will be expected to spend approximately $400,000 per year, including personnel costs. This estimate is based on costs for similar activities conducted by the WV State Rehabilitation Council and the WV Statewide Independent Living Council. The long-term financial impact for agencies, including DRS, of the implementation of a joint Employment First Policy and plan would be determined following the establishment of the taskforce, pursuant to SB 659.
The State of West Virginia would see an estimated reduction of $164,736 of revenue over the 5-year period, due to the loss of income tax gained by Sheltered Workshop employees. This estimation assumes, for the 264 individuals employed at Sheltered Workshops, an average hourly wage of $4.00, for an average of 20 hours per week, for 52 weeks per year, with a State income tax rate of 3%.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Michelle D. James
Email Address: Michelle.D.James@wv.gov