Bills’ fiscal notes costs don’t always add up

It has been a long-standing joke between older members of the West Virginia Legislature and legislative staffers who are also veterans of the system that fiscal notes attached to proposed bills that indicate the potential costs of that legislation are often designed to reflect the desires of the bill’s sponsors.

In other words, if the lawmakers who are sponsoring a bill really want it to become law, then the suggested fiscal note is calculated as a modest sum. But if the legislative bill sponsors are merely offering the bill to appease some constituents and really would prefer it die in committee, the estimated costs of implementation of this new law are inflated to make sure the bill has no hope of passage.

Some veteran staffers admit privately they have known some duly elected members of the House of Delegates and Senate who incorrectly describe the financial implications attached to any pending bill as a “physical note” — either as a joke or a sincere misunderstanding of the difference between the usage of the terms.

Those individuals who run the various state agencies that are affected by these bills that can increase or decrease annual costs of state government are also often guilty of inflating the projected costs if they want to kill the proposed legislation. And they also often will undercut the likely costs if they would like to see the bill become law.

Sean O’Leary, who prepared a report on this issue for the West Virginia Center on Budget and Policy, noted that as annual state revenues continue to decline “it is increasingly important that legislators understand how proposed legislation will affect the (annual state) budget.” He said the current method of creating these fiscal notes has often “led to biased, inaccurate and inconsistent information that legislators largely distrust.”

One example of this problem O’Leary cited was a 2013 bill that requires county sheriff departments to issue bulletproof vests to deputies. The attached fiscal note indicated there would be a “zero” financial impact to the state. But a potential cost of $143,750 for each county to purchase the protective vests was included in a written summary.

And a few years back, the state Department of Education estimated it would cost $1.5 billion — roughly the amount spent on K-12 education each year — to provide daily physical education classes in public schools statewide. It was an estimate that the agency obviously didn’t support because it included the costs of building new gymnasiums and athletic facilities statewide.

Legislators in both houses frequently amend bills as they move through the various committees. But most of the fiscal notes attached to those individual bills are not updated to reflect changes in the financial impact of the bill caused by those changes.

The West Virginia Center on Budget and Policy recommends an independent legislative office be created to provide an unbiased review of fiscal notes and also include an explanation how state agencies calculate the financial impact of a bill. That seems like a reasonable step.

 

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