FISCAL NOTE
Date Requested: February 11, 2023 Time Requested: 02:17 PM |
Agency: |
Puchasing Division |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
1662 |
Introduced |
SB199 |
|
CBD Subject: |
Finance and Administration |
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|
FUND(S):
Funds from all agencies using goods and services offered under this program
Sources of Revenue:
General Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill completely guts State supervision from the current “state use” program by removing the director of Purchasing and the current state use committee chairman from the ‘price-setting’ process.
This bill reverses the Legislature’s progress from last year, when it changed the language from “shall” to “may” regarding the use of nonprofit workshops. Last year’s change has prevented the costs of the state use program from skyrocketing.
The proposed bill makes it mandatory for state entities to use nonprofit workshops no matter what the cost.
This bill expands the definition of “nonprofit workshops” to include “private approved partners,” which would expand the service providers to the non-disabled, and would force the State to use all commodities and services on offer from either, no matter what the cost.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2023 Increase/Decrease (use"-") |
2024 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
362,328,250 |
362,328,250 |
Personal Services |
0 |
5,200 |
5,200 |
Current Expenses |
0 |
361,808,250 |
361,808,250 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
0 |
Other |
0 |
0 |
0 |
2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
It is difficult to know what the overall cost of the bill will be. However, based on the numbers presented by the Central Nonprofit Agency to the Committee for the Purchase of Commodities and Services from the Handicapped, the Sheltered Workshops are attempting to raise their rates significantly. In one case, a workshop presented a price increase of more than 56%, though the average increase sought by all workshops is approximately 30.99%.
§5A-3A-3(a) requires that the chairperson for the Committee for the Purchase of Commodities and Services from the Disabled be a “nongovernmental employee,” a change that could cost a significant amount of money given that §5A-3A-2(b) provides that members of the Committee “who are not state employees shall receive compensation for their service of $50 per day for each day actually engaged in the work of the committee.” A chairperson working two days/week on the Committee would therefore increase costs by $5,200 at a minimum.
Last year’s cost for janitorial services was $11,675,000. The annual increase in costs would be at least $3,623,282 for a total of $15,298,000.
Memorandum
§5A-1-1(9) expands the definition of “nonprofit workshops” to include “private approved partners,” which would expand the service providers to the non-disabled.
§5A-3-10(f)(1) replaces the judgment of the Director of Purchasing with that of the Committee for the Purchase of Commodities and Services from the Disabled. The director is a professional in the field of purchasing, and the committee would not have the expertise necessary to determine the quality and cost of all available goods and services. This could significantly slow the purchasing process.
§5A-3A-2 states that the Central Nonprofit Agency must be approved by the director of the Division of Rehabilitation Services, but in §5A-3A-2(d), the Central Nonprofit Agency is no longer required to report annually to the Division of Rehabilitation Services, but rather to the Committee for the Purchase of Commodities and Services from the Disabled.
§5A-3A-3(a) requires that the chairperson for the Committee for the Purchase of Commodities and Services from the Disabled be a “nongovernmental employee,” a change that could cost a significant amount of money given that §5A-3A-2(b) provides that members of the Committee “who are not state employees shall receive compensation for their service of $50 per day for each day actually engaged in the work of the committee.” A chairperson working two days/week on the Committee would therefore increase costs by $5,200 at a minimum.
§5A-3A-6(1) - (4) would have the Director of Purchasing defer to the Committee for the Purchase of Commodities and Services from the Disabled in all decisions related to whether or not prices and quality of services provided by the workshops are acceptable and of fair market value. This creates a tremendous burden for both the Committee and the Director of Purchasing, and will result in greater expenses for the State.
Person submitting Fiscal Note: Samantha Knapp
Email Address: samantha.s.knapp@wv.gov