Proposed Biennial Professional Registration Fee Increase for Engineers, Surveyors, and Geologists
Summary
The state board overseeing Engineers, Surveyors, and Geologists has a budget and expenditures. The costs for the state board to operate are to be covered by the biennial registration fees paid by Engineers, Surveyors, and Geologists. Currently, the operating costs for the state board exceed the revenue being garnered by the biennial registration fees (i.e., they are operating in a deficit). Accordingly, the state board has requested an increase from $50 to $100 in the biennial registration fees for Engineers, Surveyors, and Geologists. The proposed increase in the registration fees will be implemented for the 2017-2019 biennium period. Based upon revue projections, such a fee increase will gradually pay-down the current deficit and cover the board’s operation expenses through the 2025-2027 biennium period. At that time, if the projections hold, the Board will be required to again evaluate the need for a fee increase.
Listed below is an overview of the timeline regarding the past and planned actions for implementing the biennial Professional Registration Fee increase:
Proposed Regulation Received: May 04, 2015
PA Bulletin Publish Date: May 16, 2015
Close of Public Comment: June 15, 2015
Final-Form Regulation Received: June 14, 2017
Final Due By: June 15, 2017
IRRC Comments Due: July 15, 2015
Public Meeting Date: August 24, 2017
Published as Final: To be Determined
Exert from the “Regulatory Analysis Form” filed with the Independent Regulatory Review Commission (IRRC) on June 14, 2017 providing information to justify an increase in the biennial professional registration fees for Engineers, Surveyors, and Geologists:
At the Board’s meeting on March 12, 2014, representatives from the Department of State’s Bureau of Finance and Operations (BFO) presented a summary of the Board’s actual revenue and expenses for fiscal years 2006-2007 through 2012-2013 and projected revenue and expenses through fiscal year 2026-2027. At the end of fiscal year 2012-2013 (a non-renewal year), the Board had accrued a deficit of approximately $660,000. BFO projected that, without an increase in the renewal fee, at the end of fiscal year 2016-2017 (a non-renewal year), the deficit would swell to approximately $2,270,000 and would continue to grow thereafter. BFO projected that the Board’s biennial expenses would increase from a total of $2,704,000 in fiscal years 2013-2014 and 2014-2015 to $3,228,000 in fiscal years 2020-2021 and 2021-2022. With approximately 32,200 licensees at that time, BFO projected that these expenses would increase from $85 to over $100 per licensee per biennium. Therefore, the Board determined that it was necessary to raise fees to meet or exceed projected expenditures, in compliance with section 9(a) of the act. As a result, the Board voted at its March 12, 2014, meeting to propose increasing the biennial renewal fees from $50 to $100.
BFO recently reported that the Board’s actual expenses were $1,394,146 in fiscal year 2013-2014 and $1,227,117 in fiscal year 2014-2015. BFO also reported that the Board’s actual revenue was $1,787,824 in 2013-2014 and $228,467 in 2014-2015, resulting in a biennial deficit of $604,972. BFO further reports that the Board’s actual expenses were $1,366,832 in fiscal year 2015-2016 and are projected to be $1,284,000 in fiscal year 2016-2017 and that its actual revenue was $1,809,692 in fiscal year 2015-2016 and is projected to be $224,000 in fiscal year 2016-17, resulting in an estimated biennial operating deficit of $617,140. BFO further projects that, without an increase in the renewal fee, the operating deficit in the 2017-2019 biennium will be $687,000, and continued to increase each biennium to $1,426,000 by the 2025-2027 biennium, adding to the accumulated deficit. Without the proposed increase, BFO projects that the accumulated deficit will soar to $6,416,926 by the end of fiscal year 2026-2027.
By increasing the renewal fee to $100 beginning with the 2017-2019 biennium, BFO projects that, following an additional operating deficit in the 2015-2017 biennium, there will be an operating surplus of $1,022,000 in the 2017-2019 biennium that will be used to recoup part of the accumulated deficit. Based upon BFO’s projections, the new biennial renewal fee should be sufficient to recover the accumulated deficit by the end of fiscal year 2021-2022. BFO further projects that the amount of the operating surplus each biennium will continue to decrease as follows: $853,000 in the 2019- 2021 biennium; $674,000 in the 2021-2023 biennium; $484,000 in the 2023-2025 biennium; and $283,000 by the 2025-2027 biennium. Expenditures are expected to outpace revenues and become an operating deficit during the 2027-2029 biennium or shortly thereafter. At that time, if these projections hold, the Board will be required to again evaluate the need for a fee increase.
The entire brief can be read/downloaded via the following link: