FISCAL NOTE
FUND(S):
Proposed new accounts
Sources of Revenue:
Special Fund
Legislation creates:
A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The effect of this bill will be to increase annually revenue to the state's general revenue fund. The State Treasurer's Office estimates that first year increase will be $1.00 million, the second year increase will be $1.65 million, and each year thereafter the increase will be $2.17 million. The increases come from two areas. First, the State Treasurer's Office's annual fees is not expected to exceed $234,000 which is a reduction of $923,760 over that which is expected to be charged by the Investment Management Board. The second area where additional revenues would be created is where outside bank accounts would be brought into the state's treasury. The State Treasurer's Office could generate additional interest revenue for the general revenue account by investing the funds normally maintained in outside bank accounts. Our estimated additional earnings related to the outside bank accounts is based upon current market conditions earning 1.5% interest annually.
The revenues discussed herein are inclusive of expenditures of the State Treasurer's Office which by the third year are estimated to be $234,000 annually.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2003
Increase/Decrease
(use"-") |
2004
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
200,000 |
234,000 |
| Personal Services |
0 |
150,000 |
174,000 |
| Current Expenses |
0 |
50,000 |
60,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
1,004,000 |
2,173,760 |
Explanation of above estimates (including long-range effect):
Based upon prior fees, we estimate the Investment Management Board's 2003 fiscal year budget fees against the consolidated fund will be $804,000. The State Treasurer's Office anticipates needing $200,000 for the first fiscal year. This represents a decrease of $604,000 in fees and would increase deposits to the state's general revenue fund by a like amount.
A second part of this bill deals with outside bank accounts. If these accounts were to be brought back into the state's treasury, the State Treasurer's Office could generate additional interest revenue for the general revenue fund. The first year's earnings would be $400,000; $900,000 in the second year as most of the unnecessary outside accounts would be closed; and by the third year we anticipate $1.25 million in earnings.
The State Treasurer's Office anticipates the Investment Management Board would transfer investment contracts to the State Treasurer's Office. This portion of expenses would remain the same and therefore revenue neutral.
Memorandum
Person submitting Fiscal Note: Blair Taylor, Deputy Treasurer
Email Address: blair.taylor@wvsto.com