Date Requested:February 16, 2009
Time Requested:05:33 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R1715 Introduced SB265
CBD Subject: TAX CREDIT FOR NEW TEACHERS IN CRITICAL NEEDS AREA
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

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

    The stated purpose of this bill is to authorize a tax credit for new teachers in critical needs areas. It requires the State Board of Education to determine standards defining “critical needs areas” in both subject areas and geographic areas.
    
    As written, this bill would provide a tax credit against personal income taxes for new “critical needs” teachers of $1,000 per year for the first three years of employment and a credit of $500 per year for continued employment during the next four to eight years. The loss to the General Revenue Fund during the first year would be $125,000. The annual cost would rise each year, as a new group of “critical needs” teachers are added, until a maximum annual cost of more than $680,000 is reached by the eighth year of the tax credit program. Due to the lack of an internal effective date, the tax credit would first become available for the 2010 tax year.
    
    Additional administrative costs for the State Tax Department would be minimal. The State Board of Education may also incur additional administrative costs associated with this bill.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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 -687,500
3. Explanation of above estimates (including long-range effect):
    The stated purpose of this bill is to authorize a tax credit for new teachers in critical needs areas. It requires the State Board of Education to determine standards defining “critical needs areas” in both subject areas and geographic areas.
    
    As written, this bill would provide a tax credit against personal income taxes for new “critical needs” teachers of $1,000 per year for the first three years of employment and a credit of $500 per year for continued employment during the next four to eight years. The loss to the General Revenue Fund during the first year would be $125,000. The annual cost would rise each year, as a new group of “critical needs” teachers are added, until a maximum annual cost of more than $680,000 is reached by the eighth year of the tax credit program. The estimates are based upon the addition of 125 new “critical needs” teachers each year. Due to the lack of an internal effective date, the tax credit would first become available for the 2010 tax year.
    
    Additional administrative costs for the State Tax Department would be minimal. The State Board of Education may also incur additional administrative costs associated with this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to authorize a tax credit for new teachers in critical needs areas. It requires the State Board of Education to determine standards defining “critical needs areas” in both subject areas and geographic areas.
    
    The proposed bill has several concerns. First, the bill uses the term “new teacher” without a clear definition. Second, the proposed bill does not restrict the amount of the credit to income from teaching. Lastly, the proposed bill requires the State Board of Education to “develop standards applicable to defining critical needs areas” but does not provide any guidelines and/or restrictions on the Board in providing such a definition.