FISCAL NOTE
Date Requested: January 18, 2018
Time Requested: 02:57 PM |
| Agency: |
Agriculture, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1599 |
Introduced |
SB310 |
|
|---|
| CBD Subject: |
Agriculture |
|---|
|
FUND(S):
Current Funds 0250, 3081, 3082, 3084, 3090, 3091, 8703
Sources of Revenue:
Other Fund General, Special, and Federal
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
As written, SB310 transfers all real and personal property of the Division of Forestry, resources in Fund 3081, and all Forestry employees, to the Department of Agriculture. The Department of Agriculture must have all other funds (including cash balances) currently held by the Division of Forestry transferred effective July 1, 2018 as well. We believe that there are opportunities for efficiencies to be gained through realigning and consolidating activities currently performed by the Department of Commerce's Division of Forestry and the Department of Agriculture's Plant Industries Division.
Consolidation of these activities will facilitate cross-utilization of staff expertise and resources across multiple programs, and eliminate any duplication of effort that currently exists between the functions.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
6,300,000 |
6,300,000 |
| Personal Services |
0 |
4,600,000 |
4,600,000 |
| Current Expenses |
0 |
1,540,000 |
1,540,000 |
| Repairs and Alterations |
0 |
70,000 |
70,000 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
90,000 |
90,000 |
| 2. Estimated Total Revenues |
0 |
3,500,000 |
3,500,000 |
Explanation of above estimates (including long-range effect):
NOTE: THE FY 2019 AND FUTURE ESTIMATED REVENUES AND EXPENSES HAVE BEEN DEVELOPED WITH VERY LIMITED INFORMATION. THE AMOUNTS PRESENTED ABOVE REPRESENT OF THE TOTAL COST OF THE PROGRAM RATHER THAN SPECIFIC INCREASES OR DECREASES TO EXISTING FUNDING LEVELS FOR THE PROGRAM.
While SB310 specifically states that Fund 3081 will be transferred, all other Division of Forestry funds must be transferred to the Department of Agriculture as well. A current review of Special and Federal Revenue funding indicates that resources currently available for operations is substantially insufficient and must continue to be supplemented with General Revenue appropriations to achieve a reasonable transition and give sufficient time to implement the changes necessary to evaluate and appropriately structure the function to achieve the greatest benefit for the State. Based on a review of Forestry revenue and expenditures from FY15 onward, the estimated annual operating cost in excess of $6 million. When compared to average revenue of $3.5 million (including federally-funded programs), there is an anticipated deficit of $2.5-$2.7 million, which would require support via General Revenue. However, both revenue and expenses are difficult to estimate. Plans are being formulated to optimize the resources held by the Division of Forestry to closely align with and support economic growth in the industry.
Some of the factors affecting expenses for the Department of Agriculture’s initial and subsequent years of responsibility for Forestry programs include the number, composition and current salary of Forestry staff during and after the transition (the number of full-time versus temporary positions, cost of fringe benefits, leave accruals of full-time employees [including Comp Time], and/or outstanding unemployment or workers' comp claims, for example), current and future utilization of facilities, and equipment. Existing equipment and equipment needs (including vehicle fleet) would have to be evaluated by the Department of Agriculture to determine if and when future capital outlays would occur.
Also, included in the projected revenue amount is the Timber Severance Tax established under WV Code 11-13A-3b. Presently, WV Code has temporarily enacted this tax for the period of July 1, 2016, through July 1, 2019 (-3b(e)). This tax would need to be ongoing beyond 2019 in order to support Forestry operations at current levels. Should the tax be fully discontinued, additional General Revenue would be likely required to support operations.
This projection does not include anticipated revenue and expenditures of the Outdoor Heritage Conservation Program's dedicated fund (3091), as that funding source is considered highly restricted and cannot be used to support general Forestry operations.
Memorandum
Under the proposed language in SB310, WV Code 19-1-3b states that "...the Division of Forestry Fund (3081) shall be transferred to the Department of Agriculture." This language should be updated to read, "All Division of Forestry funds, including General Revenue appropriations, shall be transferred to the Department of Agriculture" to ensure that all resources currently available for program operations are transferred appropriately.
Also, under this same section (lines 65-66) the proposed language reads, "All employees of the Division of Forestry shall be transferred to the Department of Agriculture, at their existing hourly rate or salary...". This should be updated to read "All positions of the Division of Forestry shall be transferred to the Department of Agriculture."
Lastly, under 19-1A-5, the language on lines 5-6 states "The director shall be paid an annual salary as provided in section two-a, article seven, chapter six of this code: Provided, That the director's salary shall be paid solely from budget appropriations to the division." This language should be struck, as it references a section of the Code which is marked for removal.
Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
Email Address: sgillispie@wvda.us