Accounting for Impact: The Need for a Stronger Fiscal Note Process in West Virginia

Falling revenues and rising costs have squeezed West Virginia’s budget in the past few years. Any new proposal or program gets extra scrutiny from legislators who must keep the budget balanced. But when legislators or taxpayers need an estimate of how much new legislation will cost or save the state, the information they receive is often biased, inaccurate, incomplete or flawed. Read PDF of report.

Legislators rely on estimates known as fiscal notes to help them understand how legislation will affect the budget. But fiscal notes in West Virginia fall short in key areas. As a result, many legislators don’t trust their accuracy, complicating the legislative process.

Among the problems:

• Fiscal notes are generally inaccurate, with a small minority coming within 10 percent of the bill’s ultimate cost.
• Fiscal notes are often subject to bias, with the agencies that prepare them having a vested interest in how lawmakers view the cost of a proposal.
• West Virginia lacks a formal fiscal note process with defined criteria and proper oversight for ensuring their accuracy and uniformity.
• The way fiscal notes are prepared and presented is inconsistent from bill to bill.
• Local costs or savings are often ignored by fiscal notes.
• Many fiscal notes fail to explain how cost estimates were calculated.
• When multiple agencies submit fiscal notes for one bill, it can lead to fragmented and incomplete analysis.
• New fiscal notes are not prepared when bills are amended, even when significant changes are made that affect their cost.

This report includes an overview of the fiscal note process in West Virginia and discusses its problems. It also includes the results of a survey of the West Virginia legislature, showing a general dissatisfaction with fiscal notes among legislators of both parties. It recommends ways to improve the process and correct the problems that plague current fiscal notes, including improvements to the independence, uniformity, transparency, and accessibility of West Virginia’s fiscal notes.