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

Effect of Proposal	Fiscal Year
Effect of Proposal	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

Explanation of above estimates (including long-range effect):

Memorandum

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.

Person submitting Fiscal Note: Mike McKown
Email Address: Mike.P.McKown@wv.gov