FISCAL NOTE
FUND(S):
2180
Sources of Revenue:
Special Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill would prohibit the Finance Board pursuant to the WV Public Employees Insurance Act from increasing the types and levels of cost to applicable current and retired employees during the 2010 and 2012 Plan Years.
The PEIA Finance Board approved the Financial Plan for FY2009 to FY 2013 in December 2008 that resulted in an expected increase to PEIA public employees, retirees and employers. The approved Financial Plan has depleted the excess reserve and has directed that reserve be maintained at the level required by WV statute. Any compulsory fixing of the premium costs for active and retired during these two years cannot be offset by a reduction in the Plan reserve. To accomplish the intention of this bill there would have to be a one-time yearly appropriation to the PEIA from the General Fund to offset the expected revenue from the Financial Plan increase for these years. The appropriations would have to equal the revenue which would have been generated from the increase to the employee plus the expected increase from the employer. The reason for this is that under existing WV law the employee premium share must be 20% of the employer premium contribution and the employer contribution 80%. If there is an increase to the employer share these two years without a corresponding increase by the employee, then the employee premium share would not be the required 20%. (See WV Code ยง 5-16-5)
To maintain the current PEIA Financial Plan and the viability of the PEIA the yearly appropriations would have to be:
FY2010 $ 35,800,000.00
FY2011 $ 76,300,000.00
Total Cost for 2 Year Freeze $ 112,100,000.00
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 |
35,800,000 |
76,300,000 |
| 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 |
35,800,000 |
76,300,000 |
Explanation of above estimates (including long-range effect):
The projections were taken from the PEIA Plan Financial Plan FY 2009 to FY2013. The sum of the annual appropriations are the Plan increases listed under "Additional Employer Premiums" and the "Employee Premiums".
Memorandum
Person submitting Fiscal Note: J. Michael Adkins, Deputy Director
Email Address: michael.adkins@wv.gov