Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
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BILL: |
Sub. H.B. 173 (LSC 127 0457-6 with
amendment HC-10) |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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CONTENTS: |
Creates the
Judicial Appointment Review Commission, creates the Judicial Allotment Review
Commission, and requires the employer of certain judges whose positions are
abolished to purchase service credit for those judges |
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STATE FUND |
FY 2009 – FUTURE YEARS |
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General Revenue Fund (GRF) |
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Revenues |
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Expenditures |
(1) Annual increase,
likely to exceed minimal, for Supreme Court to administer judicial candidate
qualification program; (2) Potential one-time intermittent increases to
purchase service credit, timing and magnitude uncertain and dependent on
future decisions |
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Victims of
Crime/Reparations Fund (Fund 402) |
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Revenues |
Loss estimated at up to
$3.5 million or more annually in locally collected court costs |
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Expenditures |
Annual decrease
commensurate with revenue loss |
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Supreme
Court Security Fund (New Fund 5DD) |
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Revenues |
Gain estimated at around
$3.5 million annually in locally collected state court costs |
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Expenditures |
Annual increase, up to
available revenues |
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Note: The state
fiscal year is July 1 through June 30.
For example, FY 2009 is July 1, 2008 – June 30, 2009.
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Victims of Crime/Reparations Fund (Fund 402). The bill requires that $2 of the court costs or bail amount that under
current law goes to Fund 402 be paid to the State Treasurer for deposit into
the Supreme Court Security Fund. LSC
fiscal staff has estimated that the provision will redirect around
$3.5 million of the fund's revenue stream annually. According to data
provided by the Office of the Attorney General, Fund 402, based on current
revenue and expenditure patterns, will become insolvent in FY 2011. Assuming that the Office of the Attorney
General's analysis is reasonably accurate, then the bill would accelerate the
fund's projected cash flow crisis.
·
Supreme Court Security Fund. The bill creates in the state treasury the Supreme Court Security
Fund (Fund 5DD) and requires that $2 of the court costs or bail amount that
under current law goes to the Victims of Crime/Reparations Fund be paid to the
State Treasurer for deposit into the new fund.
LSC fiscal staff has estimated that the magnitude of the fund's annual
revenue stream will be around $3.5 million.
·
Judicial candidate qualification program. It appears that the Supreme Court's intent is to involve its Judicial
College in the development and delivery of the necessary course(s) and that the
Court would most likely not charge an attendance or participation fee. Based on a conversation with Supreme Court
staff, it appears that the annual cost to administer the judicial candidate
qualification program will exceed minimal, perhaps around $150,000, and that
cost would most likely be covered by moneys drawn from the Court's GRF budget.
·
Judicial Allotment Review Commission. Due to the intermittent nature of the Commission's work, it seems
unlikely that the Supreme Court will need to hire any additional staff, but
would instead utilize existing staff to support the Commission in carrying out
its duties. The costs associated with
providing that support appear unlikely to exceed minimal.
·
Judicial Appointment Review Commission. The creation and operation of the Commission would not appear to
generate any readily discernible state fiscal effects.
·
Service credit. Presumably,
the cost of purchasing the service credit would be split between the state and
appropriate local jurisdiction(s) in the same proportion as the state and local
share(s) of the base annual salary in effect at the time that the judgeship is
abolished. The potential cost of
purchasing the service credit is uncertain, as such a possibility would not
occur until at least five years following the provision's effective date, and
will be contingent upon decisions of the Judicial Allotment Review Commission
and the General Assembly made at some future unknown point in time.
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LOCAL
GOVERNMENT |
FY 2008 – FUTURE YEARS |
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Counties and
Municipalities |
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Revenues |
Potential gain
in state grant moneys for court security projects, annual
magnitude uncertain |
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Expenditures |
(1) Potential annual
increase to undertake court security improvements, presumably offset in whole
or part by state grant moneys; (2) Potential one-time intermittent
increases to purchase service credit, timing and magnitude uncertain and
dependent on future decisions |
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Note:
For most local governments, the fiscal year is the calendar year. The school district fiscal year is July 1
through June 30.
·
Court security projects. It seems likely that the
state's Supreme Court Security Fund would be used, at least in part, to assist
counties and municipalities in undertaking any necessary court security
improvements projects. However, the
magnitude and timing of that state financial support is uncertain.
·
Service credit. Presumably, the cost of
purchasing the service credit would be split between the state and appropriate
local jurisdiction(s) in the same proportion as the state and local share(s) of
the base annual salary in effect at the time that the judgeship is
abolished. The potential cost of
purchasing the service credit is uncertain, as such a possibility would not
occur until at least five years following the provision's effective date, and
will be contingent upon decisions of the Judicial Allotment Review Commission
and the General Assembly made at some future unknown point in time.
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Fiscally notable provisions of the bill
For the purposes of this
fiscal analysis, the bill most notably:
·
Creates
in the state treasury the Supreme Court Security Fund (Fund 5DD) and requires
that $2 of the court costs or bail amount that under current law goes into the
Victims of Crime/Reparations Fund (Fund 402) be paid to the State Treasurer for
deposit into the new fund, and provides Fund 5DD with appropriation authority
totaling $3.8 million in each of FYs 2008 and 2009.
·
Requires
the Supreme Court to establish by rule a judicial candidate qualification
program.
·
Creates
the Judicial Appointment Review Commission to make nonbinding recommendations
to the Governor for the appointment of persons to fill judicial vacancies.
·
Creates
the Judicial Allotment Review Commission to study the number of judges on trial
courts and courts of appeals in relation to each court's caseload and to make
recommendations to the General Assembly regarding the creation and abolition of
judgeships.
·
Requires
the employer of certain judges whose positions are abolished to purchase
service credit for those judges.
Victims of Crime/Reparations Fund (Fund 402)
The bill requires that $2 of the
court costs or bail amount that under current law goes to the Attorney
General's Victims of Crime/Reparations Fund (Fund 402) be paid to the State
Treasurer for deposit into the new fund.
LSC fiscal staff has estimated that the magnitude of the fund's annual
revenue stream will be around $3.5 million.
According to
data provided by the Office of the Attorney General, Fund 402, based on current
revenue and expenditure patterns, will become insolvent in FY 2011. The fund's end of year cash balance
decreased from $34.6 million in FY 2006 to $23.2 million in FY 2007, is
projected to decrease to $2.6 million by the close of FY 2010, and is projected
to post a deficit by FY 2011. Assuming
that the Office of the Attorney General's analysis is reasonably accurate, then
the bill would accelerate the fund's projected cash flow crisis.
Based on
information provided by the Office of the Attorney General, this decrease in
the fund's end of year cash balance is due to a variety of factors. First, the fund is taking in less revenue in
the form of court costs. In FY 2003,
$18.5 million in court costs was collected; in FY 2007, $16.1 million in court
costs was collected. LSC fiscal staff
has estimated that the bill will redirect $3.5 million of that annual amount
into the Supreme Court Security Fund.
Second, the
magnitude of the fund's annual disbursements has increased. For example, disbursements on: (1) DNA services have expanded from $400,000
in FY 2003 to $2.3 million in FY 2007, (2) crime victim compensation awards
have increased from a total of $19.7 million in FY 2003 to $25.5 million
in FY 2007, and (3) victim assistance program subsidies have increased from
$2.8 million in FY 2003 to $5.2 million in FY 2007. Costs associated with child and elder protection were $0 in
FY 2003, but increased to $1.7 million in FY 2007.
Overall, the
fund's total annual revenues have decreased from $25.7 million in FY 2003 to
$25.6 million in FY 2007, while the fund's total annual expenditures have
increased from $24.1 million in FY 2003 to $37.0 million in FY 2007 (an
increase of 53.5%).
Judicial candidate qualification program
The bill requires the
Supreme Court to establish by rule a judicial candidate qualification program
to ensure that a candidate for the office of judge is professionally qualified
for the office. The rules must include
a requirement that, subject to certain exceptions, every candidate attend one
or more courses approved by the Supreme Court totaling at least 40 hours and
covering civil and criminal procedure, the Ohio Rules of Evidence,
constitutional law, judicial demeanor and decorum, and any other subjects that
the Supreme Court may require.
It appears that the Supreme
Court's intent is to involve its Judicial College in the development and
delivery of the necessary course(s) and that the Court would most likely not
charge an attendance or participation fee.
Based on a conversation with Supreme Court staff, it appears that the
annual cost to administer the judicial candidate qualification program will
exceed minimal, perhaps around $150,000, and that cost would most likely be
covered by moneys drawn from the Court's GRF budget.
Judicial Allotment Review Commission
The bill creates the
Judicial Allotment Review Commission consisting of the Chief Justice and 18
other members and imposes on the Commission the duty to study and review the
allotment of judgeships for each trial court and court of appeals. By the first anniversary of the bill's
effective date, then by April 1 of 2013, and every 10th year thereafter, the
Commission is required to prepare and submit to the Supreme Court and the
General Assembly a report that includes the Commission's conclusions and
recommendations based on its study of the allotment of judgeships for each
court.
The bill requires the
Supreme Court to reimburse Commission members for actual and necessary expenses
incurred in the performance of their duties and may provide any professional,
technical, or clerical employees that the Commission needs to carry out its
duties.
Due to the intermittent
nature of the Commission's work, it seems unlikely that the Supreme Court will
need to hire any additional staff, but would instead utilize existing staff to
support the Commission in carrying out its duties. The costs associated with providing that support appear unlikely
to exceed minimal.
Judicial Appointment Review Commission
The bill creates a Judicial
Appointment Review Commission, consisting of seven, nine, or eleven members as determined
by the Governor, to recommend to the Governor persons to fill a judicial
vacancy when no person has been elected to fill the vacancy or when the office
of a judge becomes vacant before expiration of the regular term. Members serve without compensation and are
not authorized to be reimbursed for their actual and necessary expenses
incurred in the performance of their duties.
State and local governmental entities are neither required nor
explicitly permitted to provide any professional, technical, or clerical
support for the Commission to perform its duties and functions. Thus, the creation and operation of the
Commission would not appear to generate any readily discernible fiscal effects
for the state or local governments.
Supreme Court Security Fund (Fund 5DD)
Revenues. The bill creates in the state treasury the Supreme Court Security
Fund (Fund 5DD) and requires that $2 of the court costs or bail amount that
under current law goes to into the Victims of Crime/Reparations Fund be paid to
the State Treasurer for deposit into the new fund. LSC fiscal staff has estimated that the magnitude of the fund's
annual revenue stream will be around $3.5 million.
Expenditures. The Supreme Court is required to use the money to fund court
security projects and to adopt guidelines to govern the disbursements from the
fund. In discussing the possible uses
of these moneys with Supreme Court staff, LSC fiscal staff discerned that there
do not appear to be any concrete plans on how these moneys would be used or how
these moneys might be disbursed to assist courts in undertaking any necessary
security improvements projects.
Appropriations. The bill provides Fund 5DD with appropriation authority totaling
$3.8 million in each of FYs 2008 and 2009.
Service credit
The bill provides that if
the General Assembly abolishes a judgeship pursuant to a recommendation of the
Judicial Allotment Review Commission and the judgeship is abolished after the
five-year waiting period for a vacancy, the public employer responsible for the
judgeship that is being eliminated must provide for a purchase of five years of
service credit on behalf of the judge if certain conditions are met. Presumably, the cost of purchasing the
service credit would be split between the state and appropriate local
jurisdiction(s) in the same proportion as the state and local share(s) of the
base annual salary in effect at the time that the judgeship is abolished. The potential cost of purchasing the service
credit is uncertain, as such a possibility would not occur until at least five
years following the provision's effective date, and will be contingent upon
decisions of the Judicial Allotment Review Commission and the General Assembly
made at some future unknown point in time.
From a fiscal perspective,
the most notable differences between the As Introduced version of the bill and
its accepted substitute version (LSC 127 0457-6) can be summarized as follows:
·
Judicial salary increases. The bill's As Introduced version established new base salaries
for judges and justices of the court for calendar years (CYs) 2008, 2009, and
2010, by statute through 2010, required those base salaries increase by 3% or
the percentage increase in the Consumer Price Index (CPI) whichever is greater
in future years, and specified that this percentage adjustment applies to new
salaries beginning in 2007 and annually thereafter. LSC fiscal staff estimated that:
(1) the amount of back pay for FY 2007 would total approximately
$600,000 and create an additional state liability of approximately $600,000 in
FY 2008, (2) the increase in judicial salaries and related payroll
expenses through 2010 would cost the state up to $3.2 million or more in
FY 2008, up to $9.6 million or more in FY 2009, and up to $17.0 million or more
in FY 2010. Annually thereafter, the
state's share of judicial salaries and related payroll expenses would increase
by a minimum of 3.0%. These provisions
are not included in the accepted substitute version.
·
Victims of Crime/Reparations Fund. The bill's As Introduced version directed the Director of Budget
and Management to transfer $3,028,499 in FY 2008 and $9,239,769 in FY 2009 from
the Victims of Crime/Reparations Fund (Fund 402) to the General Revenue Fund
(GRF) and appropriated those amounts to be used by the Supreme Court to fund
the proposed increase in judicial compensation in each of those fiscal
years. These provisions are not
included in the accepted substitute version.
LSC fiscal staff: Matthew L. Stiffler, Budget Analyst