Fiscal notes, legislative analysis, cost estimates — call it what you want, but the official price tags attached to bills are a key part of legislating at every level of government.
Many states have dedicated legislative analysts, and virtually every state has at least some way of estimating the fiscal impact of proposed policies. But West Virginia’s methods may be seriously off the mark, according to a new report.
“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,” writes Sean O’Leary, a policy analyst with the West Virginia Center on Budget and Policy and the report’s author.
West Virginia is one of a handful of states that asks the agencies affected by new policies to also analyze their fiscal impact, a system that O’Leary says opens up the analyses to bias and inaccuracies as agencies unfamiliar with making such analyses are tasked with conducting them. In a 1999 survey, the National Conference of State Legislatures found that just six of 40 states have such systems.
In one instance cited by O’Leary, a bill introduced this year that requires bulletproof vests for deputy sheriffs was determined to have a $0 fiscal impact. In the footnotes, however, it’s made clear that outfitting all the relevant personnel with vests could cost as much as $287,500, but the cost would be borne by counties, so technically, it would cost the state government nothing.
A pair of official state reports on fiscal 2007 and 2008 show how the system often fails to accurately assess the impact of policies. The report shows that the state’s fiscal estimates were close — within a 10 percent margin — just slightly more often than they were off by 50 percent or more. Fiscal note estimates were close about 13 percent of the time. The notes were way off about 10 percent of the time. And those results are based on self-reporting from the agencies that conducted the fiscal notes.
The West Virginia Center on Budget and Policy found little confidence in the notes among 43 lawmakers who responded to a survey question. Nearly half of Democrats believed the notes were accurate less than half the time or never, with about three in five Republicans saying the same. The same held true when asked whether they felt the fiscal notes were prepared objectively.
Reliable estimates are key to good legislating, O’Leary argues. Without them, it’s impossible to make smart fiscal decisions. “Improving the fiscal note process should be a priority,” he writes.