Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL NOTE

(replaces Fiscal Note dated February 2, 1998)

State General Fund,Cash Fund, and Cash Funds Exempt Expenditure Impact

Federal Fund Expenditure Impact

Local Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-395

Rep. Anderson

Sen. Lamborn

Date:

Bill Status:

Fiscal Analyst:

April 20, 1998

Senate Appropriations

Steve Tammeus (866-2756)

 

TITLE:            CONCERNING A ONE-TENTH OF ONE PERCENT REDUCTION IN THE CONTRIBUTION RATE FOR EMPLOYERS IN THE STATE AND SCHOOL DIVISION OF THE PUBLIC EMPLOYEES’ RETIREMENT ASSOCIATION.



Summary of Legislation


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

General Fund

Other Fund



 



 

State Expenditures

General Fund

Cash Funds

Cash Funds Exempt

Federal Funds

Highway Users Tax Fund


($721,792)

(289,762)

(231,195)

(169,107)

(7,253)


($721,792)

(289,762)

(231,195)

(169,107)

(7,253)

FTE Position Change

None

None

Local Government Impact — This bill reduces the contribution rate for employers in the School Division of the Public Employees’ Retirement Association (PERA) from 11.5 percent to 11.4 percent. The reduced contributions would amount to $2,201,782 for FY 1998-99 and FY 1999-2000.


            This bill, as referred by the Senate Finance Committee (Senate Journal, March 18, 1998, page 490), reduces the contribution rate for employers in the State and School Division of the Public Employees’ Retirement Association (PERA) from 11.5 percent to 11.4 percent. The bill will become effective on July 1, 1998.


            This bill will affect state and school district expenditures. Therefore, the bill is assessed as having a state and local fiscal impact.


State Expenditures


            The 1998 Total Compensation Survey prepared by the Department of Personnel recommends a salary increase of 4.02 percent for FY 1998-99 for all occupational groups in the state personnel system. Based upon this recommendation, the total annual salary for FY 1998-99 for state employees would be approximately $1,419,110,000. This bill will reduce the state’s contribution rate for state employees by 0.1 percent, for a total reduction of $1,419,110 for FY 1998-99 and FY 1999-2000.



Local Government Impact


            According to the Public Employee’s Retirement Association (PERA), the average school monthly payroll for CY 1997 for school employees who participate in PERA was $176,390,909. Based upon a salary increase similar to state employees, the average monthly salary for FY 1998-99 for school employees would be approximately $183,481,826 for an annual total salary of $2,201,781,882. This bill will reduce the school contribution rate for school division employees by 0.1 percent, for a total reduction of $2,201,782 for FY 1998-99 and FY 1999-2000.



Public Employees’ Retirement Association (PERA) Impact


            The unfunded accrued actuarial liability in the PERA State and School Division is currently being amortized over a 21 year period. This amortization period takes into consideration all changes that were implemented as a result of 1997 legislation.


            This bill will reduce the annual state contributions to PERA for state and school employees as identified above. PERA believes this reduction in contributions will increase the amortization period by one year. This increase is within statutory limits and is not considered to jeopardize the actuarial soundness of the PERA fund.



Spending Authority


            This fiscal note implies that state agencies would require General Fund, cash fund, cash fund exempt, and federal fund reductions in the amount of $1,419,110 for FY 1998-99 as indicated in Table 1 on page 3 of this fiscal note.



Departments Contacted


            Personnel        PERA             Joint Budget Committee Staff







Table 1

Impact of Reducing State and School Division Contributions to PERA

(these amounts represent reductions to state Agency costs)


Table 1 - Department

Total

GF

CF

CFE

HUTF

FF

Agriculture

$11,157

5,459

5,039

527

0

132

Corrections

178,982

171,665

840

6,478

0

0

Education

16,589

14,610

988

991

0

0

Governor's Office

7,134

6,406

0

0

0

728

Health Care Policy & Financing

7,453

3,550

0

0

0

3,903

    HCPF (net GF transfer to HUM)

29,869

14,690

0

0

0

15,179

Higher Education *

403,801

198,441

190,989

14,257

0

114

Human Services

184,711

99,651

2,132

53,338

0

29,590

Judicial Department

100,273

95,462

4,811

0

0

0

    Administration**

84,028

79,217

4,811

0

0

0

    Public Defender

16,073

16,073

0

0

0

0

    Alternate Defense Council

171

171

0

0

0

0

Labor & Employment

46,052

0

11,213

2,550

0

32,289

Law

15,377

4,918

822

9,183

0

455

Legislature

10,682

10,682

0

0

0

0

Local Affairs

8,825

5,904

260

636

0

2,025

Military Affairs

3,929

1,516

0

0

0

2,413

Natural Resources

62,299

16,191

34,649

6,047

0

5,412

Personnel

25,053

11,612

118

13,323

0

0

Public Health

49,667

7,541

10,578

9,598

0

21,951

Public Safety

46,030

8,897

2,316

31,789

2,110

918

Regulatory Agencies

24,719

1,241

20,178

3,301

0

0

Revenue

58,169

41,946

1,868

9,211

5,144

0

State

2,592

0

2,592

0

0

0

Treasury

1,212

1,212

0

0

0

0

Transportation

124,534

198

370

69,967

0

53,998

Total PERA Reduction

$1,419,110

$721,792

$289,762

$231,195

$7,253

$169,107