FISCAL NOTE
Date Requested: January 31, 2023
Time Requested: 05:07 PM |
| Agency: |
Auditor, State of WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2600 |
Introduced |
HB3078 |
|
|---|
| CBD Subject: |
State Personnel |
|---|
|
FUND(S):
State Funds
Sources of Revenue:
Other Fund All State Fund Types - General Revenue; Special Revenue; and, Federal Programs. Local Funds
Legislation creates:
Creates New Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of proposed House Bill 3078 is to allow payment to employees for unused annual leave in excess of the maximum end of year carryover leave amount or to require carryover of annual leave.
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 |
2,448,000 |
2,448,000 |
| Personal Services |
0 |
2,448,000 |
2,448,000 |
| 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):
We believe implementation of the proposed legislation would result in additional costs consisting of salaries and wages, plus additional expenditures for Social Security and Medicare Employer Matching payments and employer contributions to various State retirement plans. We understand the proposed Bill would provide employees with the option to be either paid for otherwise expiring annual leave or to be allowed to carry over such leave to the subsequent year. In order to develop potential costs for implementation should passage occur, we have assumed all employees would elect a lump sum payment for such expiring leave. It should be noted that the accrued annual leave balances and expiring leave balances for employees of West Virginia University, Marshall University, West Virginia State Police and the West Virginia Supreme Court are held by those State agencies and are not contained within the WVOASIS System and any costs associated with those employees are not included in our projections.
We estimate passage of the Bill would result in an increase in salary payouts totaling approximately $2.1 Million. In addition, based on the current assessment rates for required Social Security and Medicare matching payments for employers, we have calculated those costs would increase by approximately $160,000. Lastly, we have calculated employer retirement matching payments would increase by approximately $188,000. In order to provide the Legislature with a timely submission, we utilized the current rate of 9% pertaining to employees covered under the West Virginia Public Employees Retirement System.
Memorandum
Additionally, we would note some State employees who currently find themselves in the position of surrendering expiring annual leave elect to donate such leave (for Calendar Year 2022, there was approximately $1.0 Million of donated leave) to other qualifying State employees who have exhausted their leave benefits due to extended illnesses. We believe it is reasonable to assume adoption of the Bill would lead to a change in employee behavior and these donations would be reduced. Our projection of the Full Implementation Costs of the proposed Bill are based on current salary levels and therefore any changes in salary levels in the future would change the projected costs.
Also, the required processes for developing the details of and confirming the accuracy of the Expiring Annual Leave balances which would be required to be paid out under the proposed Bill would be a labor-intensive and time-consuming process. This process would also occur concurrently with the finalization of the annual Employee W-2 Forms which must be issued by January 31st. And, its timeliness and accuracy would also depend on the ability of West Virginia University, Marshall University, West Virginia State Police and the West Virginia Supreme Court to reconcile their leave records for employees and provide the payment information to the WVOASIS Team. Also, the more than 100 other State spending units would also need to perform their reconciliations of annual leave carryovers in a timely fashion to facilitate the requested payments of otherwise expiring annual leave.
Lastly, as alluded to earlier, we recommend the Legislature submit a Fiscal Note Submission Request to West Virginia University, Marshall University, West Virginia State Police and the West Virginia Supreme Court in order to capture an estimate of potential costs for their employees.
Person submitting Fiscal Note: Michael E. Sizemore, CPA
Email Address: Mike.Sizemore@wvsao.gov