|Date Requested:February 02, 2012
Time Requested:10:54 AM
| FUND(S) |
Sources of Revenue
Legislation creates:Neither Program nor Fund
Effect this measure will have on costs and revenues of state government.
| The stated purpose of this bill is to address employee other post-employment benefits.
According to our interpretation, provisions in this bill would transfer local school board post-employment benefit liabilities associated with those employees who are funded through the State Aid to County Schools Formula from the local schools to the State. As of June 30, 2012, the estimated balance of this transfer is $820 million.
The bill would also re-dedicate $35 million in annual personal income tax collections currently dedicated to the Old Workers’ Compensation Debt Fund (Old Fund) to the West Virginia Retiree Health Benefit Trust Fund ($30 million per year) and to the Post-July 1, 2010 Employee Trust Fund ($5 million per year). The re-dedication of personal income tax revenues would not occur until the Old Fund is declared to be actuarially sound. The intended purpose of the $30 million in annual funds dedicated to the West Virginia Retiree Health Benefit Trust Fund would be to accelerate the pay-off of other post employment benefit debts related to health retirement benefits as set by the Public Employees Insurance Agency Finance Board (PEIA Board) for employees hired before July 1, 2010. The $30 million funding will result in a reduction to the AAL by $500 million.
The intended purpose of the $5 million in annual funds dedicated to the Post-July 1, 2010 Employee Trust Fund would be to fund a future incentive program for employees hired on or after July 1, 2010. Under current PEIA Board policy, any public employee hired on or after July 1, 2010 would be ineligible for an employer paid health care benefit subsidy upon their retirement.
Under current Law, a total of $95.4 million in personal income tax collections (i.e., $45 million under Section 11-21-96 of the West Virginia Code and $50.4 million under Section 4-11A-18 of the West Virginia Code) is dedicated each year to the Old Fund each year until the Fund is declared to be actuarially sound. Due to the uncertainty related to the timing of the Old Fund payoff, the current General Revenue Fund estimates for the FY2012 thru FY2017 period do not include the return of any personal income tax collections currently dedicated to the Old Fund. Therefore, passage of this bill would have no impact upon current revenue estimates for the next five years. When the Old Fund becomes actuarially sound, the additional personal income tax funds available for General Revenue appropriation would fall from $95.4 million per year under current Law to $60.4 million per year.
Other than some costs related to the administration of the newly created Post-July 1, 2010 Employee Trust Fund, there would be no additional administrative costs associated with the passage of this bill.
|Effect of Proposal||Fiscal Year|
|1. Estmated Total Cost||0||0||0|
|Repairs and Alterations||0||0||0|
|2. Estimated Total Revenues||0||0||0|
3. Explanation of above estimates (including long-range effect):