Date Requested:January 24, 2012
Time Requested:02:33 PM
Agency: Budget Office
CBD Number: Version: Bill Number: Resolution Number:
2012R1723 Introduced SB390
CBD Subject: WV Infrastructure Modernization & Development
FUND(S)
WV Infrastructure Modernization & Development Fund
Sources of Revenue
General Fund
Legislation creates:
A New Fund

Fiscal Note Summary

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

    Revenues transferred to the "West Virginia Infrastructure Modernization and Development Fund" would come from 50% of General Revenue Surpluses once the Revenue Shortfall Reserve Fund (Rainy Day A) reaches 15% of the total appropriations of General Revenue for the fiscal year just ended. The current balance in Rainy Day A is $505 million. In order to reach 15% of the total General Revenue appropriations for FY 2012 the balance in Rainy Day A would have to be $630 million, or an increase of $125 million. The General Revenue Fund would have to have a surplus of approximately $250 million at the end of FY 2012 to reach this benchmark. Assuming that General Revenue accrues a surplus of $100 million at the end of each fiscal year beginning with FY 2012, that there are no other changes in Rainy Day A's balance, and that General Revenue appropriations remain constant, then transfers to the WV Infrastructure Modernization and Development Fund would be as follows: $0 transferred at the end of FY 2012, $0 transferred at the end of FY 2013, $0 transferred at the end of FY 2014, and $50 million transferred at the end of each fiscal year thereafter.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
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 50,000,000
3. Explanation of above estimates (including long-range effect):
    Revenues transferred to the "West Virginia Infrastructure Modernization and Development Fund" would come from 50% of General Revenue Surpluses once the Revenue Shortfall Reserve Fund (Rainy Day A) reaches 15% of the total appropriations of General Revenue for the fiscal year just ended. The current balance in Rainy Day A is $505 million. In order to reach 15% of the total General Revenue appropriations for FY 2012 the balance in Rainy Day A would have to be $630 million, or an increase of $125 million. The General Revenue Fund would have to have a surplus of approximately $250 million at the end of FY 2012 to reach this benchmark. Assuming that General Revenue accrues a surplus of $100 million at the end of each fiscal year beginning with FY 2012, that there are no other changes in Rainy Day A's balance, and that General Revenue appropriations remain constant, then transfers to the WV Infrastructure Modernization and Development Fund would be as follows: $0 transferred at the end of FY 2012, $0 transferred at the end of FY 2013, $0 transferred at the end of FY 2014, and $50 million transferred at the end of each fiscal year thereafter.


Memorandum
Person submitting Fiscal Note:
Mike McKown
Email Address:
mike.p.mckown@wv.gov
    Note that the above estimates assume General Revenue surpluses of $100 million each year.
    
    Beginning on July 1, 2012, proposed language changes in §11B-2-20(f)(1) of this bill call for all interest and other return earned in the Revenue Shortfall Reserve Fund - Part B (Rainy Day B) be dedicated in support of the Medicaid Program. Assuming interest and other return earned is the same as the yearly average over the life of Rainy Day B, then approximately $8.5 million per year would be dedicated to the Medicaid Program.
    
    Also note that in §11B-2-20 (f) (1) there is no direction in where to transfer the funds that are dedicated in support of the Medicaid Program.