Date Requested:February 16, 2011
Time Requested:11:50 AM
Agency: State Budget Office
CBD Number: Version: Bill Number: Resolution Number:
2011R2682 Introduced HB3146
CBD Subject: TEA PARTY ACT
FUND(S)
ALL
Sources of Revenue
General Fund,Special Fund,Other Fund Federal; State Road; Lott
Legislation creates:
A New Fund

Fiscal Note Summary

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

    The bill seems to address the funds that are specifically appropriated in the Budget Bill (Act) each fiscal year (approx. $11 billion). It would require a reduction of $200,000,000 in the appropriated budget each fiscal year for five years and then maintain the fifth level of funding for another five years.
    
    FY 2012 Recommendations are broken down in the Budget Bill as follows by funding source (in thousands):
    General Revenue 4,015,621
    State Road Funds 1,172,323
    Federal Funds 3,801,914
    Federal Block Grants 367,704
    Lottery 163,764
    Excess Lottery 625,167
    Special Revenue 1,424,893
    Total 11,271,386
    This bill does not seem to address any of the funds that gain their spending authority from general law.
    
    It would seem to require the following reduction to appropriations each year (cumulative) if prorated between funding sources; however this would not necessarily allow the "freed up" monies to be transferred to a special revenue fund (see Concerns):
    
    Reduction each FY (in thousands)
     General
    FY 2012 Reduction 71,253
    FY 2013 Reduction 71,255
    FY 2014 Reduction 71,254
    FY 2015 Reduction 71,255
    FY 2016 Reduction 71,255
     Total 356,272
    
     Federal
    FY 2012 Reduction 67,461
    FY 2013 Reduction 67,463
    FY 2014 Reduction 67,462
    FY 2015 Reduction 67,463
    FY 2016 Reduction 67,462
     Total 337,311
    
     "Fed/Block "
    FY 2012 Reduction 6,525
    FY 2013 Reduction 6,525
    FY 2014 Reduction 6,525
    FY 2015 Reduction 6,525
    FY 2016 Reduction 6,525
     Total 32,623
    
     Lottery
    FY 2012 Reduction 2,906
    FY 2013 Reduction 2,906
    FY 2014 Reduction 2,906
    FY 2015 Reduction 2,906
    FY 2016 Reduction 2,906
     Total 14,529
    
     "Ex Lottery"
    FY 2012 Reduction 5,770
    FY 2013 Reduction 5,770
    FY 2014 Reduction 5,770
    FY 2015 Reduction 5,770
    FY 2016 Reduction 5,770
     Total 28,849
    
     St Rd
    FY 2012 Reduction 20,802
    FY 2013 Reduction 20,802
    FY 2014 Reduction 20,802
    FY 2015 Reduction 20,802
    FY 2016 Reduction 20,802
     Total 104,010
    
     "Special Approp"
    FY 2012 Reduction 25,283
    FY 2013 Reduction 25,284
    FY 2014 Reduction 25,283
    FY 2015 Reduction 25,284
    FY 2016 Reduction 25,284
     Total 126,419
    
    If any one funding source was exempted from reductions this will increase reductions of the remaining funding sources
    
    The bill states $200 million for five fiscal years shall be deposited into a new special revenue fund “Tax Relief Account” but does not address where the monies shall come from. It also says 50% of all surplus money to be deposited into the account by the legislature, but doesn’t address what surplus monies it is referring to (would assume it should refer to General Revenue).
    
    Concerns:
    Federal Funds – You cannot transfer unspent federal dollars into a special revenue fund for other uses.
    Special Revenue – These funds are set up by statute to be spent for specific purposes when the funds were established. It would take special language for any reductions to the budgeted amounts to be diverted to another fund.
    State Road Funds – Set by the constitution to be spent on specific purposes.
    Regular Lottery funds are dedicated to support Tourism, Seniors and Education --- would take law change to move to a special revenue fund that doesn’t support that purpose.
    Excess Lottery – Many of the appropriations are set by statute and it would take a law change to reduce the appropriation amounts.
    
    Most of the General Revenue funding is set by statutory boundaries (state aid formula, judicial, legislative) that would take legislative/constitutional changes and other funds are for areas of public safety and health. (See Governor’s Executive Budget Document, Volume I, page 41).
    
    
    
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 -200,000,000 -1,000,000,000
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
3. Explanation of above estimates (including long-range effect):
    The bill seems to address the funds that are specifically appropriated in the Budget Bill (Act) each fiscal year (approx. $11 billion). It would require a reduction of $200,000,000 in the appropriated budget each fiscal year for five years and then maintain the fifth level of funding for another five years. Breakdown between spending/budget categories would have to be determined by the appropriations set by the Legislature.
    


Memorandum
Person submitting Fiscal Note:
Mike McKown
Email Address:
Mike.P.McKown@wv.gov
    One area the bill does not address are any issues that may have increased costs due to program expansions (example: Medicaid) or any increases for PEIA, Retirement (smoothing PERS), salary increases, new legislative requirements, etc. This will have impacts on all funding sources. This would restrict West Virginia from being able to access and distribute any additional federal funds that are available if the spending authority must be reduced each fiscal year.