Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

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

The purpose of this bill is to establish a funding mechanism for state aid for local health departments and to establish that no public health department will experience decreases based on the new funding formula for the next three years. The Secretary shall promulgate a rule for the distribution of state aid to local health departments and basic public health services funds. The rule must include a hold-harmless provision to provide that each local health department receives no less in state support for a period of three years, beginning in the 2009 budget year. Currently, local health departments are funded by the Department from two funding sources: state aid to local health departments and basic public health service support funding. State aid funds are distributed in accordance with 64CSR67; no more than 2% is withheld for emergencies and the remaining funds are distributed on a per capita basis. The basic public health service support funding is used to ensure that each local health department receives no less in state support as compared to the 2004 budget year. Implementation of this rule, will result in some counties benefiting from the new funding mechanism. The Department estimates cost to be $1,227,168 each fiscal year for the next three years (2010-2012).

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2009 Increase/Decrease (use"-")	2010 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	1,227,168	0
Personal Services	0	0	0
Current Expenses	0	1,227,168	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):

Using the new funding formula and a hold harmless provision, it will cost the Department $1,227,168 each year for the next three years. This estimate was calculated based upon the new funding formula which uses a per capita weighted population distribution. Coefficients of poverty, health status, population density and interventions were used to develop the weighted distribution formula. This estimate is based upon the assumption that funding increases indicated for one county would not be offset by decreases to another county. Although the study recommends a base amount of $203,138 for each local board of health to support four (4) positions (administrator, nurse, sanitarian and clerk) this estimate does not include base amount in the formula for each of the 55 counties. The above estimate includes 1.32% of the total annual funds to be set aside for the emergency fund.

Memorandum

The West Virginia Public Health Partnership, which is comprised of representatives of both the Bureau for Public Health and local health departments, contracted with the Center for Business and Economic Research at Marshall University (CBER) to perform an independent analysis of service levels, funding and fund distribution. One of the key findings of this study was that adopting a new formula that better represents the needs and fiscal capacities of the local bodies would better distribute State funding. The study recommended a new formula to distribute State Aid based upon prevalence of poverty, health status, population density, intervention/permits, and consolidations. The current amount of funding available in the budget for the local health departments is not sufficient to implement the recommended funding formula. To meet the three year hold harmless period, as specified in the proposed legislation, requires an additional $1,227,168 so that all counties will receive at least the same amount as they currently receive in FY 2009. Using the FY 2009 budget totals and applying the formula, 22 counties will receive an increase in funding. An additional $1,227,168 is necessary for the remaining 33 counties to be held harmless equal to the FY 2009 amount. At the end of the three year hold harmless period, without continuing the funding increase of $1,227,168, the 33 counties will suffer losses ranging from $2,193 to $146,372.

Person submitting Fiscal Note: Martha Yeager Walker
Email Address: dhhrbudgetoffice@wv.gov