LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 78TH LEGISLATIVE REGULAR SESSION
 
April 10, 2003

TO:
Honorable David Swinford, Chair, House Committee on Government Reform
 
FROM:
John Keel, Director, Legislative Budget Board
 
IN RE:
HB3007 by Swinford (Relating to state personnel and other state human resources matters.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB3007, As Introduced: a positive impact of $41,330,400 through the biennium ending August 31, 2005.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2004 $19,201,800
2005 $22,128,600
2006 $26,341,200
2007 $30,606,600
2008 $30,606,600




Fiscal Year Probable Savings/(Cost) from
GENERAL REVENUE FUND
1 		Probable Savings/(Cost) from
GR DEDICATED ACCOUNTS
994 		Probable Savings/(Cost) from
FEDERAL FUNDS
555 		Probable Savings/(Cost) from
OTHER SPECIAL STATE FUNDS
998
2004 $19,201,800 $5,217,400 $12,125,600 $3,500,200
2005 $22,128,600 $7,218,400 $15,039,200 $3,554,800
2006 $26,341,200 $9,677,800 $19,836,800 $7,306,600
2007 $30,606,600 $11,716,000 $24,759,200 $10,522,000
2008 $30,606,600 $11,716,000 $24,759,200 $10,522,000

Fiscal Year Change in Number of State Employees from FY 2003
2004 (894.0)
2005 (1,067.0)
2006 (1,411.0)
2007 (1,735.0)
2008 (1,735.0)

Fiscal Analysis

The bill would allow agencies to make salary bonus payments of up to $5,000 under certain circumstances when hiring new employees or to retain current employees. Because the language is permissive, agencies would not require additional funds to make use of the provision.

The bill would require the State Auditor's Office to perform workforce planning tasks for the agencies.

Agencies with more than 100 FTEs with a ratio of human resources personnel to employees exceeding 1:100 would need to reduce their human resource personnel, although agencies with fewer than 500 FTEs could participate in an outsourcing project managed by the Council on Competitive Government; all agencies with fewer than 100 FTEs would be required to participate in the project if it is deemed cost effective for them to do so. 

The bill would impose limitations on the allowable management to staff ratio at state agencies, equal to 1:8 in fiscal year 2004, 1:9 in fiscal year 2005, 1:10 in fiscal year 2006 and 1:11 afterwards. Agencies would have to reduce management staff to meet the ratios. 


Methodology

Managers are included if they spend one-half or more of their time managing. If they are eliminated, employees will have to assume the workload carried by the former manager(s) and other personnel will have to assume additional management responsibilities. Remaining managers will do less work since they are managing more. It is assumed that 60 percent of the salaries of affected managers could be saved by an agency without unduly affecting the overall quantity of work performed.  Estimates of management FTE reductions required are made for agencies which exceed the targeted ratio for each of the ratio targets. Savings in a given year would be 60 percent of salaries of affected managers at an agency, with additional savings in employee benefits.

Human resources staff are assumed to spend all of their time performing human resources duties. It is assumed that 100 percent of the salaries of affected human resource personnel could be saved. Under this scenario, the Texas Department of Criminal Justice and the Texas Youth Commission may have difficulties maintaining adequate staffing, especially for correctional officers. Estimates of human resource personnel reductions are made for agencies which exceed the 1:100 ratio. Savings in a given year would be 100 percent of salaries of affected human resources staff at an agency, with additional savings in employee benefits.

Salaries and benefits amounts and FTE levels for affected personnel were provided by the Comptrollers Office, though a 40 percent reduction was made to the amounts that apply to affected management positions.

Savings are estimated from 2003 appropriated levels and may not be fully realized under the initial General Revenue funding amounts for the 2004-05 biennium currently under consideration by the Legislature.


Local Government Impact

No fiscal implication to units of local government is anticipated.


Source Agencies:
304 Comptroller of Public Accounts, 308 State Auditor's Office, 320 Texas Workforce Commission, 601 Department of Transportation, 362 Texas Lottery Commission, 405 Department of Public Safety, 501 Department of Health, 582 Commission on Environmental Quality, 655 Department of Mental Health and Mental Retardation, 696 Department of Criminal Justice
LBB Staff:
JK, JB, JO, GO, WM, MS