Fiscal Notes Offer Limited, Sometimes Inaccurate Information
Contact: Sean O’Leary – 304-720-8682, email@example.com
[Charleston, WV] – In order to decide whether or not to vote for a piece of legislation, West Virginia’s legislators often rely on fiscal notes. Calculated by various state agencies, fiscal notes are intended to give legislators information on the financial impact of a particular bill, how much a new law will cost the state, or how much it might benefit the state. Read PDF of report.
In a report released today, “Accounting for Impact: The Need for a Stronger Fiscal Note Process in West Virginia,” the West Virginia Center on Budget and Policy recaps a survey it took of state legislators and their opinions of the fiscal note process. It also provides examples of where fiscal notes have failed to do their job.
“As revenues continue to fall, it is increasingly important that legislator’s understand how proposed legislation will affect the budget,” explained Sean O’Leary, Fiscal Policy Analyst with the West Virginia Center on Budget and Policy. “Fiscal notes are the price tags of legislation and intended to inform legislators and the public of the fiscal impact of legislation. The state’s current process for producing fiscal notes, however, has led to biased, inaccurate, and inconsistent information that legislators largely distrust, complicating the legislative process.”
The report stresses the importance of legislators having accurate and complete fiscal notes as they review proposed pieces of legislation. It also includes several recommendations for how to improve the state’s current process including the establishment of a Legislative Fiscal Office which would provide an unbiased review of fiscal notes.
Key findings of the report include:
- 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.