FISCAL NOTE

Date Requested: February 11, 2021
Time Requested: 02:38 PM
Agency: Division of Regulatory and Fiscal Affairs
CBD Number: Version: Bill Number: Resolution Number:
1571 Introduced HB2288
CBD Subject:


FUND(S):

General Fund, 0165 0170

Sources of Revenue:

General Fund

Legislation creates:

Decreases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


Currently, members receive $150 per day in compensation during extended or extraordinary sessions without limit. This bill would eliminate compensation after five (5) days in the event of an extended or extraordinary session when the purpose for said session is the passage of a budget bill not enacted during the regular session.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2021
Increase/Decrease
(use"-")
2022
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
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):


This bill would reduce personal services costs by up to $21,838.65 [(100 Delegates + 34 Senators)*($150 per day + $1.50 retirement accounts + $11.475 FICA)] each day that the extended or extraordinary session extends beyond the five (5) day period. The $150 per day is the compensation noted in the bill, the $1.50 retirement account is based on current member enrollment of approximately 10 percent and 10 percent employer contribution (thus 1 percent of $150), and the $11.475 FICA is based on the rate of 7.65 percent multiplied by the $150 per day in compensation. Based on our interpretation, this bill would not affect either the overnight stay allowances or mileage reimbursements. Also, note that in years where the budget bill is passed within the 65-day window, no cost savings will occur. We examine past Legislative Sessions to provide context on the historical likelihood that H.B. 2288 would come into effect. Across the 2010 to 2020 Legislative Sessions, the budget bill was not passed within the 65-day window in four out of 11 years, most recently in 2017. Excluding 2017, the maximum number of days to pass the budget bill was 67, yielding a potential savings to the state of $43,677.30 ($21,838.65 per day*2 days). In the exception year of 2017, however, the Senate and House of Delegates were called to order for 82 days to enact the budget bill. In this outlier year, the potential direct savings would have been $371,257.05 ($21,838.65 per day*17 days).



Memorandum


As the number of days to pass the budget bill varies from year to year, it is impossible to directly assign a number to the fiscal savings from this legislation aside from noting the direct savings of $21,838.65 per day, assuming each member is present. If the budget bill is passed within 65 days, no costs savings will occur. Additionally, this assumes full attendance by both chambers on each day following the 65-day window. For each member not in attendance, cost savings decrease by approximately $162.98 per day. Finally, there are additional potential indirect cost savings from this bill. Should the bill be enacted, the lack of compensation from day 66 onwards may encourage members to expedite the budget bill process. For each day that the Legislature adjourns early because of this expedition, personal costs would decrease from not requiring the presence of per diem staff on those days. Information from the House and Senate Fiscal Offices show that the House has per diem expenses of $5,900 per day and the Senate has total payroll per diem costs of $5,519 per day. Thus, each day that all per diem employees are present incurs a cost of $11,419 per day. As all per diem staff may not be necessary on those specific dates, this represents an upper bound on these potential cost savings. Other potential cost savings from fewer persons present at the Capitol include savings on utilities, although such savings are likely marginal and thus not calculated here.



    Person submitting Fiscal Note: Peter Shirley
    Email Address: peter.shirley@wvlegislature.gov