FISCAL NOTE
Date Requested: February 02, 2024
Time Requested: 03:00 PM |
| Agency: |
Highways, Division of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3274 |
Introduced |
HB5434 |
|
|---|
| CBD Subject: |
Roads and Transportation; State Personnel |
|---|
|
FUND(S):
State Road Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
This bill has the potential to disproportionately increase Division of Highways employee salaries by $10,000 per person, per year. In addition, there would be expense related to employer portions of benefit (PEIA) costs.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
23,000,000 |
23,000,000 |
| Personal Services |
0 |
23,000,000 |
23,000,000 |
| 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Approximately 5,500 employees in the Division of Highways
*Assuming ΒΌ of employees would qualify for the additional $10,000 per year locality pay differential, that would equal approximately 1,375 employees.
*1,375 employees multiplied by the highest differential pay possible ($10,000 per year) would be an additional $13,750,000 in personal services cost for the agency.
*Employer portion of benefit costs would be approximately an additional $9,075,000 in expense.
*Total salary and benefit costs would be $22,850,000 additional expense per year.
It should be noted that any increase in salary costs to the DOH are expenses which are paid directly out of the State Road Fund. There is no provision to offset this cost from General Revenue. The direct result if this bill is implemented would be for the agency to reduce spending in other areas such as road maintenance or equipment purchases to offset the additional expenses.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
This bill as drafted has the potential to create pay inequities among the various employees across the State. It will also inadvertently shift staffing issues between our locations. Employees who live near areas deemed eligible for locality pay may leave their current location to try and capture the additional salary differential. This bill will have an adverse impact on DOH because of the increase in salary expenditures along with the unintended consequences mentioned above.
It should also be noted that should this proposed legislation become law, proven successful DOH programs would be eliminated due to the pay differential.
-The Bridge Management Program (among the best in the nation).
-The Transportation Worker Apprenticeship Program.
-Transportation Engineering Technician Program.
-WVDOH pay plan that afforded every employee a defined compensation/career path, in addition to immediate pay increases after implementation.
In summary, the value of the programs listed above is exponential and are vital to the successful, data-driven approach to DOH operations. Additionally, this proposal would create an inequity between rural and urban parts of the state and does not solve any recruiting or retention challenges.
In addition, the programs listed above are approved US Department of Labor Programs. This proposed legislation has the potential to cost the DOH in the form of federal funding, which would have detrimental repercussions for the DOH and the state road system.
Person submitting Fiscal Note: Jonathan W Schaffer
Email Address: Jonathan.w.schaffer@wv.gov