SB 0883 - Fiscal Note

Fiscal Note - SB 0883 - Revises the authority of the Missouri Department of Transportation

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3728-05

BILL NO. Truly Agreed to and Finally Passed CCS for HCS for SB 883

SUBJECT: Transportation Department

TYPE: Original

DATE: May 13, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
State Road Fund	($135,378)	($166,581)	($170,745)
Total Estimated Net Effect on All State Funds	($135,378)	($166,581)	($170,745)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 5 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Transportation (DOT) assume that they would incur costs to the State Road Fund as follows as a result of this proposal:

• One-time overtime labor costs of approximately $516 in FY 99 to set up the initial computer programs that will take existing information located in several databases and bring the data together on an annual basis.



• 1/2 FTE for a Senior Transportation Planner to compile all necessary information into the report for the Governor and General Assembly. Costs for personal services would be approximately $17,136 annually plus fringe benefits.



• Expenses for compiling and copying the report of approximately $500 annually.



• Estimated costs for an audit by an independent public accountant of $150,000 annually. Officials indicate there could be some offset to this cost if costs of the audit performed by the state auditor were reduced in light of the requirement for an independent outside audit.



• Personal service costs for the newly-created position of Director of DOT of $110,000 annually, as well as fringe benefits of $49,500.

Oversight assumes that the computer programs to be developed to compile existing information into the desired format should be able to produce annual reports, thereby eliminating the need for additional personnel to produce such reports. Oversight also assumes that since detailed budgets are already printed and the additional overtime and copying costs noted by DOT are minimal, DOT should be able to absorb these costs through its normal budget. Oversight also assumes that there should be offsetting savings for the additional audit costs in the form of reduced costs for the audit performed by the state auditor. SAO auditors should be able to rely on at least a portion of the work performed by the independent auditors, thus reducing staff audit time.

Therefore, Oversight has reflected costs only for the newly-created director's position within DOT.

Officials of the Missouri Senate and the Missouri House of Representatives assume the proposal would have no fiscal impact to either body.

ASSUMPTION (continued)

Officials of the Office of the State Auditor assume the legislation would have no fiscal impact to their office, as they assume their appropriations for conducting audits of the DOT would not change.

Officials of the Office of Administration - Division of Budget and Planning assume that the intent of the provision removing the requirement that highway patrol members and radio personnel annual salaries be increased only by the cost-of-living portion of the pay plan appropriated for merit employees is to make such persons eligible for within-grade salary increases also offered to merit employees. Assuming such increases were appropriated and approximated 2% of current salaries, the additional amount of personal services would be approximately $1,014,399. Oversight assumes that any additional salary increases would not be required, but would be permissive and subject to appropriation. Any salary increases should be addressed through the normal budgetary process.

Relating to the amendment that would change the limit on business taxes imposed by cities and counties for outdoor advertising structures from $100 to two percent of the gross annual revenue produced by the outdoor advertising structure, income received from this activity by cities and counties could increase or decrease, depending upon the amounts of revenue earned by the outdoor advertising structures. For billboards earning $5,000 annually, there would be no change in the tax assessed. Oversight assumes that any impact on the total amount of business taxes collected on billboards could be significant, particularly in larger cities and counties where revenues would likely be substantially greater, but the amounts are unknown.

Additional duties assigned to the Oversight Division as a result of this proposal could be carried out with existing resources.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
STATE ROAD FUND
Costs-Department of Transportation
Personal services (1 FTE)	($93,921)	($115,569)	($118,458)
Fringe benefits	(41,457)	(51,012)	(52,287)
Equipment and expense (audit costs)	(150,000)	(150,000)	(150,000)
Total costs-DOT	($285,378)	($316,581)	($320,745)
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
(continued)	(10 Mo.)
STATE ROAD FUND (continued)
Savings-Office of State Auditor
Equipment and expense (audit costs)	$150,000	$150,000	$150,000
NET EFFECT ON STATE ROAD FUND	($135,378)	($166,581)	($170,745)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
CITIES AND COUNTIES
Income-additional business taxes collected on
outdoor advertising	Unknown	Unknown	Unknown

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

The proposal would establish the Joint Committee on Transportation Oversight, composed of seven members of the transportation committees of the senate and house of representatives and three ex-officio members. Prior to November 10th of each year, the Department of Transportation (DOT) would be required to submit detailed reports to the Governor and General Assembly. The report would contain specific required elements and be audited by an independent public accountant selected by the commissioner of administration. The proposal would also require the Highways and Transportation Commission to appoint a Director of DOT.

Provisions are included for assessing fines against contractors and subcontractors that employ illegal aliens in conjunction with state agency projects.

The proposal would remove the restriction on salary increases for highway patrol members and radio personnel that currently limits such increases to cost-of-living increases offered to merit employees.

DESCRIPTION (continued)

Cities and counties would be allowed to adopt regulations governing outdoor advertising that are more restrictive than state regulations. The limit on business taxes imposed by cities and counties on outdoor advertising would be changed from $100 per year to two percent of the gross annual revenue produced by the outdoor advertising.

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

Department of Transportation

Missouri Senate

Missouri House of Representatives

Office of the State Auditor

Office of Administration - Division of Budget and Planning

Jeanne Jarrett, CPA

Director

May 13, 1998