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 purpose of this bill is to establish a funding mechanism for state aid for local health departments and to establish that no public health department will experience decreases based on the new funding formula for the next three years. The Secretary shall establish a rule for the distribution of state aid to local health departments and basic public health services funds. The rule must include a hold-harmless provision to provide that each local health department receives no less in state support for a period of three years, beginning in the 2009 budget year. Currently, local health departments are funded from two funding sources: state aid and general revenue (basic public health funding). State aid funds are distributed in accordance with 64CSR67; no more than 2% is withheld for emergencies and the remaining funds are distributed on a per capita basis. The basic public health funding is used to ensure that each local health department receives no less in state support as compared to the 2004 budget year. Implementation of this rule with a $55,000 base amount of funding for each county, will result in every county benefiting from the formula at a minimum of $55,000. It would cost the Department $5,261,972 each fiscal year for the next three years (2010-2012) to provide this base and hold counties harmless for the next three years.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2009 Increase/Decrease (use"-")	2010 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	5,261,972	5,261,972
Personal Services	0	0	0
Current Expenses	0	5,261,972	5,261,972
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):

Using the new funding formula including a base per county of $55,000 with the hold harmless provision, it would cost the Department $ 5,261,972 each year for the next three years. This estimate was calculated based upon the new funding formula which uses a per capita weighted population distribution. Coefficients of poverty, health status, population density and interventions were used to develop the weighted distribution formula. As recommended in the funding study, the estimated calculation includes an increase in funding for the Department for support of the local health departments to cover expanded services which will be provided. In the past, the Department has been funded at 4.5% of the total county distribution. The same percentage of the the total county distribution will result in an increase in funds of $230,933 for the Department to use as state support of local health services. This estimate is based upon the assumption that funding increases indicated for one county would not be used to offset decreases for another county. Although the study recommends a base amount of $203,138 for each local board of health to support four (4) positions (an administrator, nurse, sanitarian and clerk) this estimate uses $55,000 as the base amount in the formula for each of the 55 counties. The above estimate includes 1% of the total annual funds set aside for the emergency fund.

Memorandum

The West Virginia Public Health Partnership, which is comprised of representatives of both the Bureau for Public Health and local health departments, contracted with the Center for Business and Economic Research at Marshall University (CBER) to perform an independent analysis of service levels, funding and fund distribution. One of the key findings of this study was that adopting a new formula that better represents the needs and fiscal capacities of the local bodies would better distribute State funding. The study recommended a new formula to distribute State Aid based upon prevalence of poverty, health status, population density, intervention/permits, and consolidations.

Person submitting Fiscal Note: Martha Yeager Walker
Email Address: dhhrbudgetoffice@wv.gov