FISCAL NOTE
Date Requested: April 07, 2025
Time Requested: 11:31 AM |
| Agency: |
Education, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1903 |
Amendment |
HB2167 |
|
|---|
| CBD Subject: |
Education (K12) |
|---|
|
FUND(S):
0317
Sources of Revenue:
General Fund
Legislation creates:
Increases Existing Expenses, Decreases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This legislation, in its current form, increases the total cost to the State under the Public School Support Plan (PSSP) of approximately $9,572,989
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
9,572,989 |
9,572,989 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
9,572,989 |
9,572,989 |
| 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):
The total cost to the state under the Public School Support Plan for the proposed legislation is estimated to be $9,752,989. This cost estimate can be broken down into an impact as follows: PEIA - $4,740,874; Annual Employer Share to CPRB - $1,305,596; Unfunded Retirement Liability - $3,706,519.
In accordance with section 12.5.e of WVBE Policy 3300, “If a charter school does not elect to participate in PEIA, the unspent allocation for the charter school shall be treated by the WVDE the same as any unspent allocation for the county boards of education.” In consultation with PEIA, this amount is used to reduce the state’s succeeding year’s obligation under PEIA. If the legislation were to pass, this reduction no longer takes place creating an increase in expense to the state. The non-participating charter school’s allocation is outlined in WVBE Policy 3300 as follows:
12.5.d.1. Determine the number of charter school students who were enrolled in each county board of education in the previous year.
12.5.d.2. Calculate the total number of professional educator positions, service personnel
positions, and professional student personnel support positions that were attributed to the charter school students based on each county’s population density category.
12.5.d.3. Multiply the number of total positions attributable to the charter school students by the average employer PEIA premium for each county board of education.
12.5.d.4. Multiply the subtotal from subsection 12.5.d.3 by 99 percent.
12.5.d.5. Reduce each county board of education’s calculated PEIA allowance by the amount derived in subsection 12.5.d.4.
12.5.d.6. The charter school’s PEIA allowance is the total amount derived in subsection 12.5.d.4 for all county boards of education that had charter school students enrolled in the previous year.
In accordance with section 12.6.e of WVBE Policy 3300, “If a charter school does not elect to participate in the TRS and TDC plans sponsored by the CPRB, any unspent retirement allowance calculated for the charter school shall be transferred to the CPRB to apply to the TRS unfunded retirement liability.” If the proposed legislation were to pass, this additional pay down of the unfunded retirement liability will no longer occur increasing the state’s annual obligation to put funding towards reducing the liability. The non-participating charter school’s allocation is outlined in WVBE Policy 3300 as follows:
12.6.d.1. Determine the number of charter school students that were enrolled in each county board of education in the previous year (since state aid funding is based on the previous year).
12.6.d.2. Calculate the total number of professional educator positions, service personnel positions, and professional student support personnel positions that were attributed to the charter school students based on each county’s population density category.
12.6.d.3. For each category of personnel, multiply the number of positions calculated in subsection 12.6.d.2 by the average state minimum salary for each county board of education and each county’s average retirement contribution rate.
12.6.d.4. Add the total calculated in subsection 12.6.d.3 for each category of personnel to determine the total estimated retirement contribution attributable to the charter school students for each county board of education.
12.6.d.5. Multiply the total from subsection 12.6.d.4 by 99 percent.
12.6.d.6. Reduce each county board of education’s calculated retirement allowance by the amount derived in subsection 12.6.d.5.
12.6.d.7. The charter school’s retirement allowance is the total amount of the amounts derived in subsection 12.6.d.5 for all county boards of education that had charter school students enrolled in the previous year.
Under the proposed legislation, a calculation must occur to determine the amount of funding to be distributed to non-TRS-participating public charter schools for an “unfunded retirement liability” payment. The calculation was determined by determining a “statewide average per-pupil unfunded retirement liability” amount (approx. $1,209) and multiplying the figure by the non-participating non-TRS-participating public charter school enrollment count.
Memorandum
WVDE recommends PEIA and CPRB be consulted on the fiscal impact of this legislation.
It should be noted that public charter schools were non-existent when the unfunded liability was created by a lack of funding put forth into the system.
The WVDE computes a participating school district’s allocation of the unfunded retirement liability based on the school district’s proportional share of covered payroll in comparison to the statewide total. Non-participating school districts would not have “covered payroll” in which TRS funding is based upon.
WVDE believes the proposed legislation disincentivizes public charter schools from participating in state-sponsored healthcare plans and retirement systems. Specifically, the unfunded retirement liability outlined in the proposed legislation is additional cash flow sent directly to the school district that no other school districts receive.
Person submitting Fiscal Note: Tina Payne
Email Address: tina.a.payne@k12.wv.us