Congress of the United States JOINT COMMITTEE ON TAXATION Washington, D.C. 20515 Honorable Vic Fazio Page 3 January 10, 1992 division of the Internal Revenue Service. The budget of SOI does not permit that office to perform the types of data manipulation that the Joint Committee needs for the preparation of revenue estimates. Furthermore, preparation of these data files by the Joint Committee staff would require significant diversion of staff time away from the preparation of revenue estimates. In some cases, the Joint Committee on Taxation has purchased data files that have been developed by economists and statisticians in the private sector or at universities. These data files are necessary for the staff's revenue estimation and economic analysis work and are not otherwise available. The $195,000 requested increase will fund no more than 4 or 5 such consulting contracts. It is not unreasonable to assume that each contract will cost a minimum of $25,000 to $50,000 and any one contract could be more than $50,000. Because of the demands for Joint Committee staff time in the preparation of revenue estimates, it is imperative that the Joint Committee have sufficient funds to obtain the data files necessary to prepare accurate estimates of the revenue effects of Member revenue proposals. In addition, the staff of the Joint Committee on Taxation is considering the purchase of specialized computer models developed by private firms that could be used in the preparation of revenue estimates. b. Equipment.--I am requesting a $249,000 increase in the appropriation for equipment expenses. In addition to normal cost-of-living increases incorporated into the appropriation request, there are two additional components to this request. First, new accounting rules for the House of Representatives will require, in fiscal year 1993, that the Joint Committee on Taxation make specified equipment maintenance payments. I anticipate that these required equipment maintenance expenses will account for approximately $120,000 of the requested increase. I note that this expense is not discretionary and, therefore, is not within the Congress of the United States JOINT COMMITTEE ON TAXATION Washington, D.C. 20515 Honorable Vic Fazio January 10, 1992 Second, approximately $129,000 of the requested increase is an estimate of the need of the Joint Committee on Taxation for replacement and upgrades to existing equipment and purchases of new equipment. As the number of staff economists employed by the Joint Committee on Taxation increases, the staff's needs for the computer equipment that these economists use on a daily basis similarly increases. The purchase of new personal computers (PCs) for the economists is not a discretionary expense; 2 economists cannot be asked to share a PC because virtually all of the staff economists spend a significant percentage of their days using their computers to prepare responses to Member requests. In addition to the new equipment expenditures necessary for all new Joint Committee on Taxation economists, expenditures for upgrades of existing equipment will be necessary. The Joint Committee on Taxation devotes significant resources to the preparation of revenue estimates, distribution analyses, and other economic analyses of proposed revenue legislation. The nature of this work and the speed with which the staff is normally asked to complete its analyses requires that the Joint Committee on Taxation staff utilize the most sophisticated and technologically advanced equipment. Thus, the staff finds it necessary to upgrade computer software and hardware constantly to enable the staff to provide the service required and expected by the Members of Congress. In that regard, I anticipate that the Joint Committee staff will have to begin replacing the existing PCs with desktop work stations by 1993. Many of the PCs are now several years old and seriously outdated. The technology that has led to the development of desktop work stations will be approximately 20 times faster than the Joint Committee staff's current PCs. The use of this technology will substantially improve the efficiency of the Joint Committee staff. However, it is likely that each desktop work station will cost in the neighborhood of $30,000 - $40,000. The Joint Committee's staff librarian is experimenting this year with a work station that is tied to the Library of Congress. This work station allows the staff immediate access to the video/laser disk document storage system now i : Congress of the United States JOINT COMMITTEE ON TAXATION Washington, D.C. 20515 Honorable Vic Fazio January 10, 1992 amount of hard copy we now require from the Library. However, after this year, we will be required to purchase a work station in order to continue this arrangement that benefits both the Joint Committee on Taxation and the Library of Congress. I I have requested a total increase in the appropriation attributable to personnel expenses of $382,000 (.0%). believe this modest increase in the appropriation for personnel expenses is justified for the reasons stated below. a. Number of authorized positions.--The Joint Committee on Taxation is authorized 77 staff positions for fiscal year 1992. As of January 1, 1992, 74 staff positions are filled; 3 of these positions are temporary research or staff assistant positions at very low rates of pay. The staff of the Joint Committee on Taxation is currently interviewing prospective job applicants to fill the following positions: (1) a senior staff attorney, (2) a senior economist, (3) a mid-level economist, and (4) 2 entry level economists. I am confident that these positions will be filled by the end of fiscal year 1992. In the last two years, the Joint Committee on Taxation has had difficulty filling the 7 staff positions originally authorized for fiscal year 1991. Our principal difficulty stems from the fact that the previous Chief of Staff and Deputy Chief of Staff had announced their intentions to leave the staff of the Joint Committee on Taxation by mid-1990. This announced departure essentially placed the hiring activity of the Joint Committee on Taxation on hold until a new Chief of Staff was appointed in March of 1991. This cycle The hiring cycle for economists typically requires that job interviews take place in January and February for appointments in August or September of that year. reflects the fact that a large percentage of new Ph.D. economists teach or are otherwise associated with universities in their final year of training, and the academic year typically ends during the summer. Congress of the United States JOINT COMMITTEE ON TAXATION Washington, D.C. 20515 Honorable Vic Fazio January 10, 1992 Thus, the effective hiring freeze that existed for the Joint Committee on Taxation staff until March of 1991 hindered the staff's ability to interview to fill vacant economist positions until December of 1991. The staff has just completed initial interviews with approximately 25 prospective job candidates. I am confident that, with the new Chief of Staff and Deputy Chief of Staff in place, the staff will be able to fill the open economist positions by the end of fiscal year 1992. The fiscal year 1992 appropriation for the Joint Committee on Taxation included approximately $400,000 for the vacant staff positions. The calculations detailed below indicate that the Joint Committee will need approximately $384,000 for those positions. Accordingly, I think that the $400,000 assumed by the Subcommittee on Legislative for fiscal year 1992 is a reasonable amount and a similar assumption has been incorporated into the calculations of anticipated personnel expenses. b. Calculation of payroll base.--The $382,000 requested increase in the appropriation for personnel expenses was calculated based on the Joint Committee on Taxation's actual payroll for December 1991 with certain adjustments. A detailed description of these calculations is provided in Attachment E. The Joint Committee staff's December 1991 payroll was $395,116. This payroll was adjusted to reflect the following: (1) the appointment of a new Deputy Chief of Staff effective January 1, 1992, (2) the departure of a staff economist as of January 5, 1992, (3) the filling of all vacant positions at an estimated monthly expense of approximately $32,000, and (4) the 1992 authorized COLA. The assumed monthly payroll with these adjustments will be $450,725; this reflects an anticipated annual payroll expense of $5,408,700 (or approximately $44,000 less than the fiscal Congress of the United States JOINT COMMittee on TaXATION Washington, B.C. 20515 Honorable Vic Fazio January 10, 1992 c. Cost-of-living increase.--The $5,408,700 anticipated annual payroll base was adjusted to reflect a $150,100 (2.775%) cost-of-living increase effective January 1, 1993. d. Merit increases.--An additional $276,200 is requested to provide average merit increases of 4.97% effective for fiscal year 1993. As you know, the Joint Committee on Taxation professional staff, comprised of certified public accountants, Ph.D. economists, and lawyers with private law practice or significant government experience, agree to work for the Joint Committee on Taxation at salaries substantially below those available in the private sector. The Joint Committee staff performs a unique and valuable function in providing the Congress with independent, expert technical assistance in all aspects of the tax legislative process. The Appropriations Committee has recognized in the past that the Joint Committee on Taxation must be able to attract and retain an adequate number of highly qualified professionals. If the Joint Committee is to meet its staffing needs over time, it is essential that the requisite level of funding be maintained on a consistent basis. It is unlikely that the Joint Committee on Taxation will be able to pay competitive salaries in the short term. However, if the staff is going to be able to retain qualified employees for at least reasonable periods of time, the staff must have the resources to provide modest merit increases. Mr. Chairman, as the Congress continues to search for ways to balance the budget and reduce the deficit, we will continue to rely on the staff of the Joint Committee on Taxation to provide us with their technical support. As our demands on the Joint Committee staff increase, the likelihood of significant staff turnover will also increase. It is imperative that the Joint Committee on Taxation have adequate resources (1) to meet the demands of the Congress and (2) to attract and retain qualified personnel. The appropriation request for fiscal year 1993 is intended merely to provide |