Workers

Workers’ Compensation Board

The 21-day amendments to the Executive Budget recommend the following changes (analysis as of February 13, 2008):

Increases personal service appropriations for the following programs:
- Workers’ Compensation Program (SRO), Maintenance Undistributed (MU) Account for suballocation to the DOL for services and expenses of a statewide survey of occupational injuries and illnesses (+$11,000). This increase results in an appropriation of $251,000 for this account’s personal service funding, which is an increase of $26,000 from the SFY 2007-08 enacted budget.
Decreases personal service appropriations for the following programs:
- Workers’ Compensation Program (SRO), MU Account for suballocation to the DOH for expenses incurred in the development of inpatient hospital rates for workers’ compensation benefit payment (-$21,000). This decrease results in an appropriation of $185,000 for this account’s personal service, which is an increase of $25,000 from the SFY 2007-08 enacted budget.
Increases both of the Workers’ Compensation Program (SRO) Maintenenace Undistributed (MU) accounts’ nonpersonal service funding. The nonpersonal service funding within the MU account for the statewide survey of occupational injuries and illnesses increased by $4,000, largely due to a decrease in indirect costs and an increase in fringe benefits. The nonpersonal service funding within the MU account for the inpatient hospital rates for workers’ compensation benefit payments increased by $6,000, largely due to a decrease in contractual services and an increase in indirect costs. As a result of these changes the proposed nonpersonal service appropriation for both accounts is $166,000 (an increase of $6,000 from the SFY 2007-08 enacted budget) and $172,000 (a decrease of $24,000 from the SFY 2007-08 enacted budget).

The Executive Budget recommends (analysis as of January 29, 2008):

A SFY 2008-09 workforce of 1,539. There is no change from the adjusted FTE level for SFY 2007-08.

The total appropriation for Personal Service is $84.6 million, a decrease of $83,000, or 1%.
An all funds decrease of $11 million (-5.2%) from SFY 2007-08, which is primarily due to decreases in the Workers’ Compensation Program’s Nonpersonal Service funding (contractual services). According to the Assembly the decrease “reflects a change in the anticipated response by the Board to defaults in group trusts that are self-insured for Workers’ Compensation purposes.” The Assembly states that the Executive is “planning on introducing legislation outside of the budget to establish a long-term mechanism to smooth the fiscal impact to the State of defaults of group self-insured trusts.”
The following programs have an increase in personal service funding that is not associated with an increase in FTEs in SFY 2008-09. These funding and position changes should be clarified with management.
1. System Modernization Program, SRO (+$45,000).
2. Workers’ Compensation Program (SRO), Maintenance Undistributed (MU) Accounts (+$61,000). This includes two MU accounts: one MU is for suballocation to the DOL for services and expenses of a statewide survey of occupational injuries and illnesses (+$15,000); and the other MU is for suballocation to the DOH for expenses incurred in the development of inpatient hospital rates for workers’ compensation benefit payments (+$46,000).
The Assembly analysis shows a net increase in Special Revenue Funds of $1.99 million for the cost of salary and other fixed cost increases, which may be the rationale for some of the above listed personal service funding increases.
The following programs had a decrease in personal service funding that is not associated with an increase in FTEs in SFY 2008-09. These funding and position changes should be clarified with management.
1. Disability Benefits Program, SRO (-$33,000).
2. Workers’ Compensation Program, SRO (-$156,000).
The Workers’ Compensation Board employed an estimated 92 employees under consultant contracts in SFY 2007-08 at an estimated cost of $13 million or an average cost of $141,359 per consultant contract employee. It is estimated that $13.3 million will be allocated for consultant contracts in SFY 2008-09 for 96 employees, at an average cost of $138,719 per consultant contract employee.
The following programs had substantial decreases in the proposed contractual services appropriation when compared to SFY 2007-08:
1. System Modernization, SRO (-$1.7 million).
2. Workers’ Compensation Program, SRO (-$13.8 million).

Workers Compensation Board
Program Details-State Operations
	Enacted	Proposed	Change in	Percent
Program	2007-08 Budget	2008-09 Budget	Appropriation	Change
All Funds	$212,803,000	$261,261,000	$48,458,000	22.8%
Special Revenue-Other (SRO)	$212,803,000	$261,261,000	$48,458,000	22.8%

Personal Services	$84,727,000	$84,634,000	($93,000)	-0.1%
Contractual Services	$81,283,000	$65,767,000	($15,516,000)	-19.1%

Disability Benefits (SRO)	$7,670,000	$7,761,000	$91,000	1.2%
Personal Service	$3,819,000	$3,786,000	($33,000)	-0.9%
Regular	$3,794,000	$3,761,000	($33,000)	-0.9%
Holiday/overtime compensation	$25,000	$25,000	$0	0.0%
Nonpersonal Service	$3,851,000	$3,975,000	$124,000	3.2%
Supplies and materials	$66,000	$68,000	$2,000	3.0%
Travel	$7,000	$7,000	$0	0.0%
Contractual Services	$1,831,000	$1,875,000	$44,000	2.4%
Equipment	$15,000	$15,000	$0	0.0%
Finge Benefits	$1,804,000	$1,877,000	$73,000	4.0%
Indirect Costs	$128,000	$133,000	$5,000	3.9%

System Modernization (SRO)	$39,417,000	$40,374,000	$957,000	2.4%
Personal Service	$4,970,000	$5,015,000	$45,000	0.9%
Regular	$4,898,000	$4,942,000	$44,000	0.9%
Holiday/overtime compensation	$72,000	$73,000	$1,000	1.4%
Nonpersonal Service	$34,447,000	$35,359,000	$912,000	2.6%
Supplies and materials	$56,000	$99,000	$43,000	76.8%
Travel	$10,000	$67,000	$57,000	570.0%
Contractual Services	$31,396,000	$29,665,000	($1,731,000)	-5.5%
Equipment	$470,000	$2,867,000	$2,397,000	510.0%
Fringe Benefits	$2,348,000	$2,485,000	$137,000	5.8%
Indirect Costs	$167,000	$176,000	$9,000	5.4%

Workers' Comp Prog. (SRO)	$165,716,000	$213,126,000	$47,410,000	28.6%
Personal Service	$75,553,000	$75,397,000	($156,000)	-0.2%
Regular	$75,183,000	$74,924,000	($259,000)	-0.3%
Temporary service	$120,000	$171,000	$51,000	42.5%
Holiday/overtime compensation	$250,000	$302,000	$52,000	20.8%
Nonpersonal Service	$89,422,000	$77,487,000	($11,935,000)	-13.3%
Supplies and materials	$1,400,000	$1,434,000	$34,000	2.4%
Travel	$1,500,000	$1,536,000	$36,000	2.4%
Contractual Services	$48,000,000	$34,196,000	($13,804,000)	-28.8%
Equipment	$300,000	$307,000	$7,000	2.3%
Fringe Benefits.	$35,691,000	$37,375,000	$1,684,000	4.7%
Indirect Costs	$2,531,000	$2,639,000	$108,000	4.3%
Maint.Undistrib.	$741,000	$774,000	$33,000	4.5%

MU - Occupational Injuries and Illness	$385,000	$417,000	$32,000	8.3%
Personal Service	$225,000	$251,000	$26,000	11.6%
Regular	$225,000	$251,000	$26,000	11.6%
Nonpersonal Service	$160,000	$166,000	$6,000	3.8%
Supplies and materials	$4,000	$3,000	($1,000)	-25.0%
Travel	$4,000	$2,000	($2,000)	-50.0%
Contractual Services	$31,000	$31,000	$0	0.0%
Equipment	$5,000	$2,000	($3,000)	-60.0%
Fringe benefits	$108,000	$118,000	$10,000	9.3%
Indirect costs	$8,000	$10,000	$2,000	25.0%

MU - Workers Compensation Benefit Pmt	$356,000	$357,000	$1,000	0.3%
Personal Service	$160,000	$185,000	$25,000	15.6%
Regular	$160,000	$185,000	$25,000	15.6%
Nonpersonal Service	$196,000	$172,000	($24,000)	-12.2%
Supplies and materials	$29,000	$5,000	($24,000)	-82.8%
Contractual Services	$25,000	$0	($25,000)	-100.0%
Travel	$0	$1,000	$1,000	100.0%
Equipment	$60,000	$5,000	($55,000)	-91.7%
Fringe benefits	$76,000	$84,000	$8,000	10.5%
Indirect costs	$6,000	$77,000	$71,000	1183.3%

Workers Compensation Acct (p.229)	$0	$59,468,000	$59,468,000	100.0%