FISCAL NOTE



FUND(S):

Unemployment Compensation Trust Fund

Sources of Revenue:

Other Fund Unemployment Compensation

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


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


The proposed change of increasing the Nondeductible Earnings to 40% of the WBA would result in an estimated additional Unemployment Compensation benefits cost of $1,800,457 during calendar year 2008 and $2,679,836 in calendar year 2009. The higher cost in 2009 is based on the recent increase in workload. Current year records indicate that if this proposal were implemented 48,661 weeks claimed would have paid increase benefits in 2008 and 70,522 weeks in 2009. The increased amount could be from an estimated average of $37 in 2008 $38 in 2009. We are unable to accurately estimate the administrative cost of this proposal. However, significant programming changes would have to be completed, forms would have to be revised and customer confusions would result in additional staff time to explain the different nondeductible earnings for each claim. Our best estimates would be $35,000 in salary and benefits and $17,000 in non-personal expenses.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 35,000 0 0
Current Expenses 17,000 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 2,679,836 2,813,828 2,813,828
2. Estimated Total Revenues 0 0 0


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


The proposed change of increasing the Nondeductible Earnings to 40% of the WBA would result in an estimated additional Unemployment Compensation benefits cost of $1,800,457 during 2008; $2,679,836 in 2009; and $2,813,828 in 2010. The higher cost in 2009 is based on the recent increase in workload. Current year records indicate that if this proposal were implemented 48,661 weeks claimed would have paid increase benefits in 2008 and 70,522 weeks in 2009. The increased amount could be from an estimated average of $37 in 2008 $38 in 2009. We are unable to accurately estimate the administrative cost of this proposal. However, significant programming changes would have to be completed, forms would have to be revised and customer confusions would result in additional staff time to explain the different nondeductible earnings for each claim. Our best estimates would be $35,000 in staff cost and $17,000 in non-personal expenses.



Memorandum


USDOL recommends that the states Unemployment Compensation Fund maintain a factor of 1.00 of the average high cost multiple in reserve. The current fund has an average high cost multiple for the Quarter ended September 2008 of .45. If implemented, this bill would further erode the reserve unless provisions were added to include additional generation of revenue to compensate.



    Person submitting Fiscal Note: Caren Jenkins, Director of Fiscal & Admin. Mgmt.
    Email Address: cjenkins@workforcewv.org