COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 1129-01
Bill No.: SB 374
Subject: State Employees; Salaries
Type: Original
Date: March 3, 2003
FISCAL SUMMARY
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| General Revenue* | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on General Revenue Fund |
(Unknown) | (Unknown) | (Unknown) |
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Various* | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on Other State Funds |
(Unknown) | (Unknown) | (Unknown) |
* Could Exceed $100,000 in any given fiscal year.
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 7 pages.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Various* | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on All Federal Funds |
(Unknown) | (Unknown) | (Unknown) |
* Could Exceed $100,000 in any given fiscal year.
| FUND AFFECTED | FY 2004 | FY 2005 | FY 2006 |
| Local Government | $0 | $0 | $0 |
ASSUMPTION
Officials from the Department of Elementary and Secondary Education and the Department of Agriculture defer to the Office of Administration's response.
Officials from the Department of Insurance and the Department of Revenue assume the proposal would have either no fiscal or no significant fiscal impact on their agencies.
Officials from the Department of Health and Senior Services (DHSS) state employees paid by an hourly rate are those that have Hourly and Intermittent appointments with benefits and any permanent part time employees. A review of these employees in the Department at this time indicates that none have compensatory time balances which exceed 20 hours. However, this proposal would not be expected to significantly impact the operations of the DHSS. If the proposal were to substantially impact any DHSS programs, the Department would request funding through the legislative process.
Officials from the Department of Labor and Industrial Relations assume the proposal would result in no fiscal impact because all department hourly workers are part-time, they are paid for ASSUMPTION (continued)
any overtime earned and compensatory time would not be accrued.
Officials from the Department of Higher Education expect no fiscal impact as a result of this proposal because no department employees are paid on an hourly basis.
Officials from the Department of Natural Resources (DNR) state beginning on January 1, 2004, and annually thereafter, the department would be required to pay any compensatory hours accrued by hourly paid employees from the previous year. During the year, the employee would be given the option of retaining up to a total of eighty hours and requesting payment of accrued hours over twenty. Currently, the department pays hourly employees at the end of each pay period for all hours worked in the previous pay period. These employees are not allowed to accrue compensatory time. Therefore, DNR assumes this proposal will not have a fiscal impact on their department.
Officials from the Department of Economic Development (DED) assume budgeted FTE are not impacted by this fiscal note because they are salaried and not hourly employees. DED notes, if this is an incorrect assumption, they would need to re-evaluate cost. Based on this assumption, this proposal will have minimal to no impact on the department.
Officials from the Department of Transportation (MoDOT) state department policy does not allow hourly employees to accrue compensatory time, therefore there may be a cost savings in the year the compensatory time is accumulated. However, the cost of the compensatory hours will increase at the time of payout, if an employee receives a pay rate increase. MoDOT is unable to determine the negative fiscal impact/cost savings because the number of employees who would elect to accumulate compensatory time and the number of pay increases that would take place that would be reflected in the payout is unknown.
Officials from the Department of Corrections (DOC) state their department is a state merit agency who hires mostly wage earners (Overtime Pay Category 1 and 2 who accrue overtime) and salary personnel (Overtime Pay Category code 0 who do not accrue overtime in normal situations.) Certain classes of positions are filled by part-time individuals who are hired to work at an hourly wage in both temporary and permanent capacities. DOC assumes this proposal pertains to them. These hourly-paid staff already get paid for the hours they work. It is possible for them to earn comp-time in some situations, but that is kept to a minimum. DOC states their department would have a minimal fiscal impact that could be absorbed within the agency due to passage of this proposal if indeed this interpretation of this proposal is correct.
DOC notes if their assumptions on who this proposal applies to as stated above is incorrect and it ASSUMPTION (continued)
applies to all state workers, appropriations would be required due to passage of this bill. DOC could need a one-time appropriation in the first year of $1.1 million to pay existing balances under 40 hours and an approximate on-going appropriation of $3.3 million every year thereafter to keep up with the payment demand.
Officials from the Department of Public Safety - Divisions of Liquor Control, State Emergency Management Agency, Missouri State Highway Patrol and Highway Safety assume the proposal would have no fiscal impact on their agencies.
Officials from the Department of Public Safety - Divisions of Missouri Veterans Commission, Missouri State Water Patrol, Fire Safety and the Director's Office assume the proposal would have an unknown impact on their agencies.
Officials from the Department of Conservation estimate this proposal, provided the Commission decides than non-exempt and/or exempt compensatory balances should be paid off, would result in an initial payment of approximately $877,000, then approximately $750,000 annually thereafter.
Officials from the Department of Mental Health state overtime earned by employees is a significant amount annually. The following shows total overtime earned for a three-year comparison. The fiscal impact is unknown, but would be over $100,000 annually.
FYE 06/30/00 = $14,623,588
FYE 06/30/01 = $13,897,573
FYE 06/30/02 = $11,160,975
Officials from the Department of Social Services (DOS) estimate the proposal would cost $5,937 in FY 2004; $8,890 in FY 2005; and $8,890 in FY 2006. DOS assumes the cost to be split between General Revenue and Federal Funds using a 66/34% split. DOS prepared their estimate assuming all employees would request payment. The FY 2004 cost was arrived by taking data on all current hourly DSS employees with compensatory time balances and calculating the actual cost to pay their overtime balance. DOS notes FY 2005 and FY 2006 costs were based on the actual amount and cost of compensatory time earned by DOS hourly employees from January through December 2002.
ASSUMPTION (continued)
Officials from the Office of Administration - Division of Personnel (OA) assume the proposal would result in cost of at least $8.9 million to $22.4 million annually with approximately 52% of the cost being paid out of General Revenue. This cost estimate includes 18.26% for fringe benefits. OA estimates the statewide cost of this proposal based on the amount of compensatory time earned during fiscal year 2002. OA provided the following estimate:
| Description | Value of Overtime | |
| Fed and Holiday Estimated Overtime Earned in a Year | $33,281,000 | |
| State Comp Estimate (33%) | $10,982,730 | |
| Total Estimated OT Earned in a Year | $44,264,000 | |
| Less: Overtime Used or Paid
(State Comp Estimate of 33% Included) |
$21,872,000 | |
| Total Earned and Not Used or Paid | $22,392,000 | Potential Fiscal Impact if Comp Time Must be Paid |
| Less: Value of Balances Over 80 Hours | $8,911,000 | Must Be Paid (Would increase the cost to the state) |
| Remaining Balances Less Than 80 Hours | $13,481,000 | Could be paid or banked -- employee's choice |
| (Could increase the cost to the state) |
Oversight inquired of OA about the number of employees paid by an hourly rate and OA indicated there were 7,385 as of January 17, 2003. Oversight cannot determine how many state employees would be classified as receiving an hourly rate throughout the scope of this fiscal note period. OA could not tell Oversight the compensation of the hourly employees. Oversight notes that since many of the hourly employees are temporary or part-time personnel both the number of employees and the average compensation of employees are variable. Therefore, Oversight is indicating the cost to be in excess of $100,000 in any given fiscal year.
Oversight obtained a spreadsheet, prepared by Budget and Planning, which shows the percentage of FY 2003 Personal Service charged to General Revenue and Federal and Other Funds. According to this spreadsheet, 51.9% of personal service costs are charged to General Revenue and 48.1% are charged to Federal and Other funds.
| FISCAL IMPACT - State Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| GENERAL REVENUE | |||
| Cost - Various State Agencies | |||
|
Payoff of Overtime |
(Could Exceed $100,000) | (Could Exceed $100,000) | (Could Exceed $100,000) |
| VARIOUS OTHER STATE FUNDS | |||
| Cost - Various State Agencies | |||
|
Payoff of Overtime |
(Could Exceed $100,000) | (Could Exceed $100,000) | (Could Exceed $100,000) |
| FEDERAL FUNDS | |||
| Cost - Various State Agencies | |||
|
Payoff of Overtime |
(Could Exceed $100,000) | (Could Exceed $100,000) | (Could Exceed $100,000) |
| FISCAL IMPACT - Local Government | FY 2004
(10 Mo.) |
FY 2005 | FY 2006 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
No direct fiscal impact to small businesses would be expected as a result of this proposal.
DESCRIPTION
This proposal requires departments whose employees are paid by an hourly rate to pay said employees in full for any overtime hours accrued during the previous calendar year which have not already been paid pursuant to this proposal or used in the form of compensatory leave. This proposal allows state employees who are paid by an hourly rate and who have accumulated overtime hours the option of being paid (not less than 20 hours) their hourly rate for the accumulated overtime hours or use the overtime hours as compensatory leave time. An employee may retain up to eighty overtime hours. Any overtime in excess of eighty hours would be paid to the employee monthly at their normal hourly rate of pay.
This proposal is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Elementary and Secondary Education
Department of Agriculture
Department of Insurance
Department of Revenue
Department of Health and Senior Services
Department of Labor and Industrial Relations
Department of Higher Education
Department of Natural Resources
Department of Economic Development
Department of Transportation
Department of Corrections
Department of Public Safety
Department of Conservation
Department of Mental Health
Department of Social Services
Office of Administration - Division of Personnel
Mickey Wilson, CPA
Director March 3, 2003