COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 4090-01
Bill No.: HB 1535
Subject: Administration, Office of; State Employees
Type: Original
Date: February 26, 2008
Bill Summary: This proposal modifies the state employee payroll deductions for health insurance to include cafeteria plan fees.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUND |
|||
FUND AFFECTED |
FY 2009 |
FY 2010 |
FY 2011 |
General Revenue |
$150,000 |
$300,000 |
$300,000 |
|
|
|
|
Total Estimated Net Effect on General Revenue Fund |
$150,000 |
$300,000 |
$300,000 |
ESTIMATED NET EFFECT ON OTHER STATE FUNDS |
|||
FUND AFFECTED |
FY 2009 |
FY 2010 |
FY 2011 |
|
|
|
|
|
|
|
|
Total Estimated Net Effect on Other State Funds |
$0 |
$0 |
$0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ESTIMATED NET EFFECT ON FEDERAL FUNDS |
|||
FUND AFFECTED |
FY 2009 |
FY 2010 |
FY 2011 |
|
|
|
|
|
|
|
|
Total Estimated Net Effect on All Federal Funds |
$0 |
$0 |
$0 |
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE) |
|||
FUND AFFECTED |
FY 2009 |
FY 2010 |
FY 2011 |
|
|
|
|
|
|
|
|
Total Estimated Net Effect on FTE |
0 |
0 |
0 |
☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).
☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).
ESTIMATED NET EFFECT ON LOCAL FUNDS |
|||
FUND AFFECTED |
FY 2009 |
FY 2010 |
FY 2011 |
Local Government |
$0 |
$0 |
$0 |
FISCAL ANALYSIS
ASSUMPTION
Officials at the Office of Administration Division of Accounting assume this is a tax savings to state employees and to the state in the amount of FICA paid and a tax decrease to the state tax withholdings. To calculate the amount of savings to the State in the form of FICA payments not made and the loss to the state revenue from the state tax withheld it is the following equations.
- Current amount of health care deductions not being withheld tax free through the cafeteria plan X 7.65% for FICA match (employer share).
- Same amount X 6% State Tax rate = affected State Tax withheld.
Officials at the Department of Revenue assume that there is no fiscal impact from this proposal.
FISCAL IMPACT - State Government |
FY 2009 (10 Mo.) |
FY 2010 |
FY 2011 |
GENERAL REVENUE |
|
|
|
|
|
|
|
Savings - General Revenue |
|
|
|
FICA not paid |
$550,000 |
$1,100,000 |
$1,100,000 |
|
|
|
|
Loss - General Revenue |
|
|
|
reduction of state tax withheld |
($400,000) |
($800,000) |
($800,000) |
|
|
|
|
ESTIMATED NET EFFECT ON |
|
|
|
GENERAL REVENUE |
$150,000 |
$300,000 |
$300,000 |
FISCAL IMPACT - Local Government |
FY 2009 (10 Mo.) |
FY 2010 |
FY 2011 |
|
|
|
|
|
$0 |
$0 |
$0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This bill allows a deduction for cafeteria plan administrative fees from a state employee's compensation except when the employee affirmatively elects not to participate in the plan.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration
Division of Accounting
Department of Revenue
Mickey Wilson, CPA
Director
February 26, 2008