1 Credentialing Fees Department of Regulation and Licensing Legislative Audit Bureau September 2004

2 Department of Regulation and Licensing’s Regulatory Activities u Support 21 boards with independent authority to license and discipline members u Support 17 additional boards and councils with more limited authority u Regulate directly a limited number of professions u Wisconsin has 318,000 individual and business credential holders in 84 professions and 26 business types

3 Largest Regulated Professions Registered Nurse67,700 Physician20,500 Engineer19,600 Barber or Cosmetologist19,300 Barbering or Cosmetology Manager15,500 Licensed Practical Nurse15,500 Real Estate Salesperson13,600 Real Estate Broker13,400 Certified Public Accountant12,600 Private Security Person10,200

4 Staffing and Funding u full-time equivalent staff and a FY budget of $11.1 million u All funds are program revenue, primarily from new and renewal credentialing fees u Statutes require that credentialing fees for each profession reflect the cost of services received by that profession

5 Fee Concerns u New credentials are $53; renewals vary from $53 to $343 u Department’s proposal for new fees in FY budget rejected for two reasons: – calculations were based on estimates rather than actual costs – proposal resulted in significant fee changes for some professions u LAB directed to determine whether the fee methodology reflected actual regulatory costs

6 Current Allocation Method u Most costs (72.6%) are allocated equally, regardless of differences in level of service to different professions u Costs that are allocated by level of service (27.4%) are allocated by inaccurate measures of service delivery costs

7 Proposed Allocation Method u Percentage of costs allocated based on level of services increases from 27.4% to 58.2% u Costs will be calculated based on actual time spent rather than estimates

8 Comparison of Current and Proposed Allocation Methods

9 Recommended Improvements to Proposed Method u Increase further the proportion of costs allocated based on actual staff time spent u Provide clear explanations of allocation methods to make the process more transparent and understandable

10 Future Considerations u Determining levels of service for the boards u Determining total revenue needs

11 Appropriation Balances (in millions) FY FY Opening Balance$2.7$3.6 Revenues Lapses to General Fund (2.2) Total Available Expenditures Closing Balance$3.6$1.1

12 Legislative Options u Make no fee changes u Consider surcharges for those professions wishing increased levels of service u Consider adding an inflation factor to all fees u Implement the proposed methodology with the recommended improvements

13 Renewal Fee Comparisons ProfessionMidwest Avg.WI Physician$272$106 Pharmacist Certified Public Accountant Engineer Barber Registered Nurse Licensed Practical Nurse Cosmetologist Real Estate Broker