Workers’ Compensation Board
The enacted budget makes the following changes to the proposed Executive Budget:
· Increased the All Funds appropriation by $2.1 million; a $14.8 million decrease to the SFY 2009-10 enacted budget.
· The enacted budget includes a $1.7 million increase in personal service from the Executive Budget proposal, including a $1.59 million increase in the Workers’ Compensation Program; a $72,000 increase in the Disability Benefits Program; and a $102,000 increase in the Systems Modernization Program.
The Assembly Resolution makes no changes to the Executive Budget’s State Operations appropriations (analysis as of 3/24/10).
The Senate Resolution recommends the following changes to the Executive Budget (analysis as of 3/22/10):
· Reduces the contractual services spending by $916,160 in the Systems Modernization Program for the initiative to replace stenographers with digital recorders.
The Executive Budget recommends (analysis as of January 25, 2010):
A SFY 2010-11 workforce of 1,450. This increases the level of FTEs from the adjusted FTE level for SFY 2009-10 by 25, which reflects positions added to protect injured workers’ benefits in both defaulted and viable self-insured groups. The 25 FTE increase will be achieved through the attrition of 55 FTEs offset by 80 new fills. The following chart identifies adjustments in the current fiscal year’s FTEs along with the recommended differences in FY 2010-11 FTEs by program (if the FTE’s are the same the program is not listed):
|
Program |
FY 2009-10 Adjustment |
FY 2010-11 Est. FTEs
3/31/11 |
FY 2010-11 Difference |
|
Disability Benefits |
-8 |
43 |
0 |
|
Systems Modernization |
-13 |
68 |
0 |
|
Workers Compensation |
-87 |
1,339 |
+25 |
|
Total |
-108 |
1,450 |
+25 |
· The difference between the estimated FTEs for SFY 2009-10 and the adjusted level of 2009-10 FTEs is -108. This should be addressed at statewide labor management.
· The total appropriation for Personal Service is $91.0 million, a $1.7 million decrease from SFY 2009-10. However, the Agency Presentation indicates that the total personal service appropriation for SFY 2010-11 is $90.8 million. It appears that the Agency Presentation does not include the personal service appropriation allocated to the Maintenance Undistributed (MU) account, which has a total personal service appropriation of $185,000.
· According to the Senate analysis, there is a decrease of 106 FTEs due to the 2009-10 Workforce Reduction Plan and collective bargaining savings, which we believe reflects WCB’s share of the proposed $250 million in union concessions. The overall decrease is offset by the addition of 25 FTE’s necessary for the implementation of Article VII legislation to address the increased number of defaults with Group Self-Insurance Trusts (GSIT), fringe benefit adjustments, and increased costs to continue administering current programs. This 106 FTE decrease may be related to the SFY 2009-10 adjustment described in the above chart and the difference in the numbers should be clarified at statewide labor management.
· An All Funds appropriation of $220.3 million, which is a decrease of $16.9 million (-7.1%) from SFY 2009-10. However, the Agency Presentation shows an All Funds total of $202.3 million for SFY 2010-11, a net decrease of $15.1 million. The Agency Presentation does not include the $18 million appropriation for the Workers Compensation Account, which is located in the “contingent and other appropriations” section of the budget appropriation bill.
·
The All Funds decrease includes a $13.1 million
(-18.4%) decrease in contractual services. Most of the
All Funds net
change primarily reflects a $20 million or -100% decrease in the Workers’
Compensation Program’s MU appropriation for Occupational Injuries and Illnesses;
which includes a decrease in contractual services (-$14.5 million); and personal
service (-$1 million). According to
the Agency Presentation this MU was a
non-recurring appropriation to improve quality, timeliness and fairness of
services performed by the Board.
·
According to the
Assembly Yellow Book, the Executive
proposal includes the following
increases: +$6.8 million related to salary and fixed cost increases; +$4.4
million in fringe benefits; and +$1.5 million for staff needed to implement
Article VII language to employers who self-insure for Workers’ Compensation.
It also, according to the Assembly,
includes the following decreases:
-$20 million for one-time revenue received (described above); -$5.8 million
related to employees who left through attrition or opted to take a severance
package offered under the SFY 2009-10 Workforce Reduction Plan; and -$2.1
million related to anticipated collective bargaining savings (i.e. proposed
union concessions).
·
The following program has a significant
decrease in personal service funding that is not associated with a
decrease in FTEs in SFY 2010-11. These funding and position changes should be
clarified with management.
o System Modernization Program, SRO (-$591,000 or -11.2%).
·
According to the
Senate analysis, the Executive
proposes deficiency Article VII legislation required for the 2009-10 State
budget to pay for liabilities incurred in SFY 2009-10.
This would allow transferring funds in excess of $12 million from the
Special Fund for Disability Benefits to the General Fund.
· The Workers’ Compensation Board employed an estimated 56 employees under consultant contracts in SFY 2009-10 at an estimated cost of $9.5 million. It is estimated that the same amount of funding and number employees will be allocated for consultant contracts in SFY 2010-11.
· Proposes Article VII legislation that would:
o Protect injured workers' benefits and ensure that employers who participate in self-insured groups and group administrators fully meet their future fiscal responsibilities.
o Collect surplus funds from Workers Compensation insurance carriers. Under this legislation, anticipated additional revenue in the amount of $23.6 million will be collected, remitted to the Board and subsequently transferred to the General Fund.
| Workers Compensation Board | |||||
| Program Details-State Operations | |||||
| Enacted | Proposed | Enacted | Change in | Percent | |
| Program | 2009-10 Budget | 2010-11 Budget | 2010-11 Budget | Appropriation | Change |
| All Funds | $237,205,000 | $220,295,000 | $222,404,000 | ($14,801,000) | -6.2% |
| Special Revenue-Other (SRO) | $237,205,000 | $220,295,000 | $222,404,000 | ($14,801,000) | -6.2% |
| Personal Services | $92,765,000 | $91,025,000 | $92,787,000 | $22,000 | 0.0% |
| Contractual Services | $71,159,000 | $58,048,000 | $58,048,000 | ($13,111,000) | -18.4% |
| Disability Benefits (SRO) | $7,339,000 | $7,279,000 | $7,369,000 | $30,000 | 0.4% |
| Personal Service | $3,924,000 | $3,734,000 | $3,809,000 | ($115,000) | -2.9% |
| Regular | $3,899,000 | $3,709,000 | $3,784,000 | ($115,000) | -2.9% |
| Holiday/overtime compensation | $25,000 | $25,000 | $25,000 | $0 | 0.0% |
| Nonpersonal Service | $3,415,000 | $3,545,000 | $3,560,000 | $145,000 | 4.2% |
| Supplies and materials | $68,000 | $70,000 | $70,000 | $2,000 | 2.9% |
| Travel | $7,000 | $7,000 | $7,000 | $0 | 0.0% |
| Contractual Services | $1,468,000 | $1,505,000 | $1,505,000 | $37,000 | 2.5% |
| Equipment | $15,000 | $15,000 | $15,000 | $0 | 0.0% |
| Finge Benefits | $1,722,000 | $1,830,000 | $1,845,000 | $123,000 | 7.1% |
| Indirect Costs | $135,000 | $118,000 | $118,000 | ($17,000) | -12.6% |
| System Modernization (SRO) | $34,116,000 | $34,135,000 | $34,257,000 | $141,000 | 0.4% |
| Personal Service | $5,298,000 | $4,707,000 | $4,809,000 | ($489,000) | -9.2% |
| Regular | $5,225,000 | $4,634,000 | $4,736,000 | ($489,000) | -9.4% |
| Holiday/overtime compensation | $73,000 | $73,000 | $73,000 | $0 | 0.0% |
| Nonpersonal Service | $28,818,000 | $29,428,000 | $29,448,000 | $630,000 | 2.2% |
| Supplies and materials | $99,000 | $101,000 | $101,000 | $2,000 | 2.0% |
| Travel | $67,000 | $69,000 | $69,000 | $2,000 | 3.0% |
| Contractual Services | $23,278,000 | $23,860,000 | $23,860,000 | $582,000 | 2.5% |
| Equipment | $2,867,000 | $2,939,000 | $2,939,000 | $72,000 | 2.5% |
| Fringe Benefits | $2,325,000 | $2,309,000 | $2,329,000 | $4,000 | 0.2% |
| Indirect Costs | $182,000 | $150,000 | $150,000 | ($32,000) | -17.6% |
| Workers' Comp Prog. (SRO) | $195,750,000 | $178,881,000 | $180,778,000 | ($14,972,000) | -7.6% |
| Personal Service | $82,358,000 | $82,399,000 | $83,984,000 | $1,626,000 | 2.0% |
| Regular | $81,885,000 | $81,926,000 | $83,511,000 | $1,626,000 | 2.0% |
| Temporary service | $171,000 | $171,000 | $171,000 | $0 | 0.0% |
| Holiday/overtime compensation | $302,000 | $302,000 | $302,000 | $0 | 0.0% |
| Nonpersonal Service | $73,235,000 | $78,093,000 | $78,405,000 | $5,170,000 | 7.1% |
| Supplies and materials | $1,034,000 | $1,060,000 | $1,060,000 | $26,000 | 2.5% |
| Travel | $1,036,000 | $1,062,000 | $1,062,000 | $26,000 | 2.5% |
| Contractual Services | $31,886,000 | $32,683,000 | $32,683,000 | $797,000 | 2.5% |
| Equipment | $307,000 | $315,000 | $315,000 | $8,000 | 2.6% |
| Fringe Benefits. | $36,139,000 | $40,361,000 | $40,673,000 | $4,534,000 | 12.5% |
| Indirect Costs | $2,833,000 | $2,612,000 | $2,612,000 | ($221,000) | -7.8% |
| Maint.Undistrib. | $20,357,000 | $359,000 | $359,000 | ($19,998,000) | -98.2% |
| MU - Occupational Injuries and Illness | $20,000,000 | $0 | $0 | ($20,000,000) | -100.0% |
| Personal Service | $1,000,000 | $0 | $0 | ($1,000,000) | -100.0% |
| Regular | $1,000,000 | $0 | $0 | ($1,000,000) | -100.0% |
| Nonpersonal Service | $19,000,000 | $0 | $0 | ($19,000,000) | -100.0% |
| Supplies and materials | $1,000,000 | $0 | $0 | ($1,000,000) | -100.0% |
| Travel | $0 | $0 | $0 | $0 | |
| Contractual Services | $14,527,000 | $0 | $0 | ($14,527,000) | -100.0% |
| Equipment | $3,000,000 | $0 | $0 | ($3,000,000) | -100.0% |
| Fringe benefits | $439,000 | $0 | $0 | ($439,000) | -100.0% |
| Indirect costs | $34,000 | $0 | $0 | ($34,000) | -100.0% |
| MU - Workers Compensation Benefit Pmt | $357,000 | $359,000 | $359,000 | $2,000 | 0.6% |
| Personal Service | $185,000 | $185,000 | $185,000 | $0 | 0.0% |
| Regular | $185,000 | $185,000 | $185,000 | $0 | 0.0% |
| Nonpersonal Service | $172,000 | $174,000 | $174,000 | $2,000 | 1.2% |
| Supplies and materials | $5,000 | $6,000 | $6,000 | $1,000 | 20.0% |
| Travel | $1,000 | $1,000 | $1,000 | $0 | 0.0% |
| Equipment | $5,000 | $6,000 | $6,000 | $1,000 | 20.0% |
| Fringe benefits | $84,000 | $90,000 | $90,000 | $6,000 | 7.1% |
| Indirect costs | $77,000 | $71,000 | $71,000 | ($6,000) | -7.8% |
| Workers Compensation Acct (p.326) | $19,800,000 | $18,030,000 | $18,030,000 | ($1,770,000) | -8.9% |