FISCAL NOTE
Date Requested: February 08, 2018 Time Requested: 03:13 PM |
Agency: |
Public Employees Insurance Agency (PEIA) |
CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
2404 |
Introduced |
SB486 |
|
CBD Subject: |
State Personnel, Taxation |
---|
|
FUND(S):
PEIA
Sources of Revenue:
Special Fund
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to dedicate certain severance taxes to fund PEIA. Severance tax collections on natural gas are influenced by a variety of economic factors, which can lead to volatility in actual collections. It is PEIA’s understanding the current revenue estimate for the §11-13A-3a 5 percent natural gas severance tax is $164 million per year. PEIA has reviewed the bill and remains unclear as to the second underlined section of the bill referencing a 7 and one-half percent severed tax rate, as §11-13A-3a remains 5 percent in the bill. Due to this lack of understanding of the bill, the total fiscal impact remains unclear.
Severance taxes are currently deposited into and budgeted for expenditure by the General Revenue Fund. To provide for the severance taxes to fund PEIA, there must be offsetting reductions to non PEIA programs within the General Revenue budget. Assuming the above referenced 7 and one-half percent indicates intentions of increasing the severance tax by 2.5%, this issue remains. A 33% allocation to PEIA would require reduction to other expenses.
Any additional revenue received by PEIA will be incorporated into PEIA’s financial plan at the discretion of the PEIA Finance Board. The Board will have options such as immediately reducing premiums, developing a premium stabilization reserve fund to help reduce future premium increases, or reducing member benefit costs through benefit enhancements.
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 |
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):
Memorandum
PEIA has reviewed the bill and remains unclear as to the second underlined section of the bill referencing a 7 and one-half percent severed tax rate, as §11-13A-3a remains 5 percent in the bill. Due to this lack of understanding of the bill, the total fiscal impact remains unclear.
Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov