2004 Major Issues

AGING

Repeal of Estate Recovery in ConnPACE

In 2003, the General Assembly required the Department of Social Services (DSS) to recover from the estates of deceased beneficiaries of the Connecticut Pharmaceutical Assistance Contract to the Elderly and Disabled (ConnPACE) program any ConnPACE benefits received after July 1, 2003. DSS had planned to go forward with recoveries on January 1, 2004, but in November 2003 the governor announced that the administration would not pursue recoveries. The governor said he would propose legislation in the 2004 session to repeal the estate recovery requirement, which was expected to produce future savings in DSS’ budget. The General Assembly will have to consider whether to approve the repeal.

Federal Prescription Drug Law

A new federal law establishes a voluntary prescription drug benefit for Medicare beneficiaries (seniors age 65 and over and younger disabled people). Under the law, a temporary drug discount card program will run from June 2004 to January 2006. The discount card may save enrollees between 10% and 25% on their drug costs, and will give limited federal assistance to certain low-income people. Starting in January 2006, the federal law establishes a permanent prescription drug program that (1) allows Medicare beneficiaries to enroll in private, federally subsidized prescription-only plans (except those in a Medicare HMO that covers drugs must receive their new coverage through it); (2) requires the plans to offer at least a standard package with specified premiums, copays, annual deductibles, and coverage thresholds (no coverage for costs between $ 2,250 and $ 5,100 but “catastrophic coverage” of 95% of costs above $ 5,100); and (3) provides varying levels of extra federal help for enrollees with low incomes and assets and those eligible for both Medicare and Medicaid.

The federal changes will have significant long-term budgetary and program implications for Connecticut. They could bring considerable savings but also some potential extra expenditures depending on how they are implemented.

In 2004, the General Assembly will likely consider how best to coordinate the discount card program with the state ConnPACE program that helps lower-income seniors and disabled people who are not eligible for Medicaid with their prescription drug costs. Those with full eligibility for both Medicare and Medicaid are ineligible for the temporary discount cards. Rather, their more comprehensive Medicaid prescription coverage will continue until 2006, when they will also be allowed to enroll in the permanent plans. Although the General Assembly has until 2006 to coordinate the permanent program with ConnPACE and Medicaid, it may begin developing its response this session.

Long-term Care Issues

The legislature will likely address how to provide adequate funding for existing long-term care services. Other bill proposals could address quality of care and staffing in nursing homes and for home care, long-term care worker shortages, and criminal background checks for long-term care workers. There may also be proposals to save money by helping people stay out of nursing homes and other institutions; increasing the numbers of people who receive long-term care through home care and “consumer-directed” personal care assistance; and further assisting disabled people in nursing homes move back into the community.

The Long-Term Care Planning Committee just completed its three-year Long-Term Care Plan, which makes numerous recommendations to shift the focus of long-term care from institutions to home and the community and create needed infrastructure. It also recommends balancing public and private resources to meet rising demand over the next two decades. It contains an overall goal of offering people the services and supports they choose in the least restrictive setting and long-term goals for increasing the percentages of (1) people who receive care at home or in the community and (2) long-term care costs covered by private insurance and other non-government resources. Other recommendations include more support for formal and informal caregivers; expanding personal care assistance and respite programs; and proposals related to Medicaid waivers, workforce shortages, housing, and transportation issues. While the plan does not set priorities, it highlights two legislative recommendations: (1) consider creating in statute a broad philosophical statement that individuals should receive care in the least restrictive setting and (2) allocate adequate resources for a required, but not funded, Connecticut-specific comprehensive long-term care needs assessment. The Long-Term Care Advisory Council, which advises the Planning Committee, also produced its own document identifying key issues.

Nursing Home Pre-Screening

The General Assembly may once again see proposals like those in a 2003 bill that would have required (1) additional information about a patient's high-risk behavior in the nursing home preadmission screening process and (2) a nursing home to determine in writing whether it has adequate space, programming, and trained staff to meet the patient's needs before admitting the patient. If in the course of admission or afterward, the nursing home identified any problem behavior, it would have to document in the patient's care plan that it has adequate resources to meet his needs. The 2003 bill would also have required training for nursing home staff in risk assessment and risk management of behavioral health care. Similar proposals may be made in the upcoming legislative session.

APPROPRIATIONS

Potential State Budget Adjustments

Recent projections indicate that the FY 2004 budget will experience a deficit largely due to deficiencies in several agencies and lower-than- anticipated corporation tax receipts. The governor recently implemented allotment reductions to help mitigate the deficit.

Approval of state employee arbitration awards and collective bargaining agreements may put additional pressure on the FY 2004 and FY 2005 budgets. Two arbitration awards and one collective bargaining contract have already been submitted to the legislature for approval during the 2004 session. The FY 2004 and FY 2005 budgets include no funding for wage increases for state employee contracts unsettled as of FY 2003 through FY 2005. Some additional appropriation will likely be needed, with the amount depending on the number of awards and contracts submitted and approved, and the degree to which any of the additional costs can be absorbed within agency budgets or the Reserve for Salary Adjustments account.

The state’s ability to maintain a balanced budget in FY 2004 and FY 2005 will also depend in part on achieving the budgeted savings targets related to Personal Services and Other Expenses holdbacks, the Early Retirement Incentive Program (ERIP), fleet reductions, and the Medicaid program, which together exceed $ 200 million. If these savings are not fully achieved, the General Assembly may need to take corrective action to rebalance the budget.

BANKS

Bank Conversions

Recent activities involving state-chartered banks may prompt calls for changes in the conversion process from a mutual to a capital stock bank. Legislation could address the current lack of a depositor vote requirement for converting mutual savings banks.

CHILDREN

Department of Children and Families (DCF)

The recent agreement between the governor and the federal court to create a three-member task force to assume all decision-making authority for abused and neglected children in DCF care contains no formal role for the legislature. But the task force could propose changes to DCF’s organization, services, or funding that will require General Assembly approval.

COMMERCE

Enterprise Zones Revisited

The state’s popular enterprise zone program tries to revitalize socially and economically distressed areas by encouraging businesses to relocate or expand in these areas. The legislature launched the program in 1981, when it authorized six zones. Today there are 17 zones plus many other designated areas where enterprise zone benefits are also available. The legislature may debate whether the state has diluted the program’s impact and legislators may consider bills reducing the number of zones and other designated areas where businesses qualify for tax incentives and other benefits.

Business Tax Incentives

Despite the budget deficit, the 2003 legislature kept those tax incentives designed to encourage businesses to expand facilities, upgrade machinery and equipment, and hire more workers. But questions remain about whether these incentives actually induce businesses to make investments or simply subsidize (1) investments they intended to make anyway or (2) moves to different locations within the state. Legislators may see bills tightening the conditions for businesses to qualify for incentives or requiring a stricter accounting of the economic benefits they produce.

EDUCATION

Universal Pre-School

Since 1997, the state has funded spaces in public and private school readiness programs for three- and four-year-olds living in economically and educationally needy school districts. In November 2003, the State Board of Education (SBE) adopted a proposal to expand the state’s early childhood program to all children over the next 10 years. SBE proposes to:

The SBE proposal presents many issues the General Assembly may wish to consider, including issues related to funding, educational priorities, and facilities and staffing needed for high-quality programs.

State Education Funding

An increase in the state contribution to the cost of education is a major property tax reform recommendation of the Blue Ribbon Commission on Property Tax Burdens and Smart Growth Incentives as well as a perennial demand by municipalities in the state.

In 2003, the General Assembly postponed scheduled increases in the state’s share of education funding by postponing (1) elimination of the Education Cost Sharing (ECS) grant cap and (2) an increase in contributions to the cost of special education. In 2004, the General Assembly may see proposals to increase state education aid to municipalities by removing the cap on annual increases in ECS grants to municipalities, increasing the ECS formula’s foundation level, and indexing the foundation for inflation.

Sheff v. O’Neill Settlement Implementation

In 2003, the General Assembly approved a settlement of the Sheff v. O’Neill desegregation case that commits the state to (1) fund eight new magnet schools in Hartford, (2) double the number of Hartford students participating in the Open Choice program, and (3) increase funding for interdistrict cooperative programs in the Hartford area over the next four years. Implementing the settlement could require both funding increases and statutory changes.

Although interdistrict magnet schools are a key component of the settlement, the General Assembly faces questions about their cost and operation. In 2004, the legislature may consider how to fund new magnets and divide state subsidies among existing schools, whether and how much tuition schools can charge parents, the funding formula for participating school districts, and how magnet schools relate to other interdistrict education programs and their funding.

No Child Left Behind Act Implementation

The federal No Child Left Behind (NCLB) Act’s many detailed mandates on states and local school districts, and the cost for implementing them, are likely to remain an ongoing issue for the Education Committee and the General Assembly in 2004. Some Connecticut school districts have chosen to reject federal education funding for their low-income students to avoid complying with NCLB mandates. Meanwhile, the state has already identified 149 schools and 99 school districts that have so far failed to make the annual student achievement improvements the NCLB requires. Schools and school districts that repeatedly fail to achieve the mandated level of annual improvement are subject to sanctions.

To measure improvement, the federal law requires annual testing for students in grades three through eight starting in 2005. These requirements may prompt debate about standardized tests, including (1) whether to use student test scores to evaluate teachers; (2) whether to require students to pass a test to graduate from high school; (3) test content, timing, and administration; and (4) whether tests are a valid school accountability tool.

Finally, NCLB requirements designed to reduce poor and urban school districts’ use of uncertified teachers and teachers not certified in the subjects they are teaching may require new recruiting and professional development strategies. The federal act’s mandate for higher standards and pre-employment tests for school paraprofessionals could also lead to proposals for improving their training and retraining.

School Nutrition

Several bills concerning school nutrition were proposed during the 2003 session, but the General Assembly did not enact any school nutrition legislation. With continued concern over childhood obesity and the quality of foods school children consume, school nutrition is likely to return as a major issue. The legislature may address the types and nutritional values of foods sold on school grounds, the hours during which certain foods or beverages can sold, or how they may be sold.

ENERGY AND TECHNOLOGY

Energy Reliability

Spurred by the 2003 blackout, the legislature may address measures to improve electric service reliability in southwestern Connecticut. While the recently approved Bethel-Norwalk transmission line should help, it will be several years before the line goes into service. Among the measures the legislature may consider are ways to encourage siting new generating plants in the region, particularly small plants located near end-users.

Electric and Gas Rates

It is likely that electric and natural gas rates will increase this winter. It is also likely that rate volatility (the extent to which rates go up and down each month) will increase due to trends in the wholesale markets. If either of these phenomena cause substantial hardship, the legislature may revisit the issues of utility competition and rate regulation.

ENVIRONMENT

Long Island Sound Energy Projects

The Environment Committee is expected to consider charging a fee for electric cables or gas pipelines crossing Long Island Sound and establishing a civil penalty for certain energy facilities, including utilities and pipelines, that violate any term or condition set by Connecticut Siting Council certificates or Department of Environmental Protection dredging permits.

Air Quality

The Environment Committee may consider adopting California’s stricter auto emissions standards for new cars and light trucks sold in the state. The committee also may consider proposals to reduce greenhouse gases and diesel fuel emissions.

Bottle Deposit Law

The Environment Committee will likely face issues about the state’s bottle deposit law. These may include proposals to expand or eliminate it. The issue of whether the state should receive unclaimed bottle deposits, as well as recycling in general, will likely generate proposals.

Agriculture

Various agriculture issues, including the price of milk, genetically modified foods, and the status of the Agriculture Department and its planned merger with the Consumer Protection Department, may generate legislative proposals in 2004.

FINANCE, REVENUE AND BONDING

Securitization

A 2003 law requires the state treasurer and the Office of Policy and Management secretary jointly to develop and submit to the legislature at the beginning of the session, a financing plan to raise up to $ 300 million in general revenue for the state in FY 2004-05. The plan can include (1) selling bonds or notes backed by future state revenue sources, including those from the Tobacco Settlement Agreement (“securitization”); (2) selling bonds and other debt instruments or placing them privately; or (3) having public pension funds, such as those covering state and municipal employees and teachers, buy state debt instruments.

The General Assembly will see legislation to implement the financing plan. Depending on the state’s revenue needs, the amount to be borrowed and the benefits and costs of the transaction could be issues.

State Revenues

A November 13, 2003 fiscal forecast by the Office of Fiscal Analysis projects a potential General Fund budget deficit of $ 38. 2 million for FY 2004. The state’s revenue outlook for FYs 2004 and 2005 will determine whether the General Assembly will once again consider proposals for revenue increases or tax changes. In the case of any shortfall, the General Assembly may wish to look at such options as extending temporary tax increases, deferring scheduled reductions, eliminating or reducing exemptions or credits, and changing fees.

GENERAL LAW

Underground Home Heating Oil Tank Removal

The Department of Environmental Protection operated a program between July 1, 1999 and January 1, 2002 that paid for removing underground home heating oil tanks. As a condition of payment from the program, contractors had to be licensed. There may be a proposal to require all such contractors to be licensed. Under current law, they must be registered only as home improvement contractors.

Sales at an Introductory Rate or with Automatic Renewal

There may be proposals to establish disclosure requirements for goods and services (1) sold at an introductory rate or (2) under contracts with automatic renewal clauses. The General Law Committee reported similar legislation in 2003.

Gasoline Prices

The General Law Committee has been studying gasoline price issues for several years. It will likely look at prohibiting gasoline companies and distributors from setting their prices to dealers based on the dealer’s location. This practice, known as “zone pricing,” is common in the industry. In the past year, there was an extremely high spike in gasoline prices. The committee will analyze a report from the Department of Consumer Protection on its study of the spike.

GOVERNMENT ADMINISTRATION AND ELECTIONS

Ethics

In response to recent court actions and Ethics Commission investigations, the Government Administration and Elections Committee is likely to review ethics legislation introduced but not enacted last session. Ethics proposals include extending the codes of ethics to municipal public officials and employees and lobbyists, extending the commission’s statute of limitations to five years, and strengthening the revolving door law.

Elections

Campaign finance has been the focus of legislation in most states and a U. S. Supreme Court ruling recently upheld important parts of the federal Bipartisan Campaign Reform Act of 2002. Public financing of campaigns in Connecticut has been proposed often in the past few years and it will likely come to the GAE Committee again. Issues legislators must resolve include whether a public financing program should cover statewide and legislative candidates, grant amounts for candidates for different offices who agree to limit spending, the cost of the program, and implementation details.

Another likely issue is election day registration, which allows voting age citizens to register to vote on election day with proper identification. PA 03-204 established this provision but the governor vetoed it.

The legislature also may be asked to consider the results of two pilot programs established in 2003 legislation dealing with a demonstration of electronic voting machines (PA 03-7) and absentee voting procedures (PA 03-227). Both pilot programs were conducted in connection with the November 2003 municipal elections and reports will go to the GAE Committee. Based on these reports, the legislature may consider bills to authorize or regulate voting equipment used at polling places and establish different procedures for voting by absentee ballot. Since the federal law passed with its own requirements and standards for voting machines and procedures (the Help America Vote Act of 2002), the General Assembly can finalize the state’s compliance with HAVA.

HIGHER EDUCATION AND WORKFORCE DEVELOPMENT

Teacher Shortage

Although the teacher shortage has eased temporarily because of the state’s slow economy, the age of the state’s teacher workforce; the need for minority teachers and teachers for inner city schools and subjects like math, music, world languages, and special education; and a new federal law increasing required higher qualifications for classroom teachers and paraprofessionals could make teacher recruitment and training a major issue once again.

Tuition Increases

Rising tuition at the state’s public colleges and universities is a major concern. The General Assembly may attempt to address the issue through such proposals as increased student aid, scholarships for students who do well in high school, and tuition freezes.

HOUSING

Affordable Housing

The ability to redevelop certain state-assisted moderate-income rental housing could receive further consideration this session. The affordable housing land use appeals procedure, which gives affordable housing developers the opportunity to appeal to the Superior Court if a zoning board or commission denies a developer’s application, perennially generates a number of proposals from detractors and advocates. In additional, state-assisted senior housing and recently publicized difficulties between elderly and nonelderly disabled people housed there might generate proposals.

HUMAN SERVICES

Welfare Reform—Federal Reauthorization

Congress appears to be on the verge of re-authorizing the landmark welfare reform legislation, which includes a continuation of the Temporary Assistance for Needy Families (TANF) block grant. It is anticipated that TANF rules will be tightened considerably. For example, the number of people who will have to participate in work activities is expected to rise, as is the minimum number of hours able-bodied adult recipients must work. Both versions of the federal bill include “superwaivers,” which could potentially allow states to make drastic cuts in federal social service programs, as well as to shift federal funds in a way that would reduce state spending for low-income programs. The legislature will need to make changes in the Jobs First law should Congress enact these changes.

INSURANCE AND REAL ESTATE

Medical Malpractice Insurance

The Insurance Committee will consider bills to address the rising cost and availability of medical malpractice insurance for health care providers and institutions. The Insurance Committee, along with the Public Health and Judiciary committees, will consider such things as damage caps; enhanced Insurance Department oversight and control; the incidence, reporting, and prevention of medical errors; health care quality; and other insurance, tort, and health reforms that might affect the availability and cost of malpractice insurance.

Fire Insurance

Currently, standard fire insurance policies cover damage caused by terrorism. The committee will consider amending standard fire

insurance policies either to make terrorism coverage optional or to exclude it to the extent allowed by federal law.

Health Savings Accounts

The committee will consider exempting high-deductible health plans used to establish federally qualified health savings accounts (HSAs) from the $ 50 home health care maximum deductible Connecticut law requires in certain health plans. HSAs were created by the federal Medicare Improvement Act signed into law on December 8, 2003. Last session, PA 03-78 exempted high-deductible health plans used in conjunction with medical savings accounts (MSAs) from the maximum deductible.

Flexible Benefit Plans

The committee will consider requiring the Insurance Commissioner to permit the approval and sale of health insurance plans that are designed to reduce insurance premiums by offering choices based on benefit levels or size of provider network, varying deductibles depending on the type of facility used, and the use of deductibles and coinsurance, among other things.

JUDICIARY

Prison Overcrowding

The legislature may consider proposals to deal with the increasing prison population. The Department of Correction (DOC) continues to face overcrowding conditions and the legislature recently authorized DOC to negotiate a contract to send an additional 2,000 out-of-state. The legislature also created an Alternatives to Incarceration Advisory Committee to investigate the feasibility and effectiveness of various alternatives to incarceration and advise the DOC commissioner. The General Assembly may see efforts to increase alternatives to incarceration; address the management of the parole, probation, and pre-trial populations; alter mandatory minimum sentence provisions; and expand substance abuse and other treatment programs.

Same-Sex Marriage or Civil Unions

The legislature is likely to consider bills authorizing committed, same-sex partners to marry or enter into civil unions that confer rights afforded to heterosexual married couples. The Judiciary Committee rejected similar legislation in the 2003 regular session.

Expanding Juvenile Court

In 2003, the legislature directed an implementation team to study and make recommendations for raising the age limits for juvenile court jurisdiction from 15 to 16 or 17. The team’s report is due January 15, 2004, and implementing legislation will likely be taken up when the legislature reconvenes.

LABOR AND PUBLIC EMPLOYEES

Binding Arbitration

The General Assembly may consider making changes in laws on binding contract arbitration for state and municipal employees and teachers and school administrators. Proposals could include (1) requiring the General Assembly (or at least one house) to approve arbitration decisions before they become effective, (2) increasing the amount a school district can reserve that an arbitrator or arbitration panel cannot consider when determining a district’s ability to pay, and (3) establishing such a reserve for municipal binding arbitration.

PLANNING AND DEVELOPMENT

Sprawl/Smart Growth

Like most states, Connecticut is looking for ways to mitigate or prevent the unintended consequences of new developments and manage the spread of new homes, shopping centers, and office parks in sparsely populated areas in ways that do not clog highways, eliminate farms and open spaces, spoil scenic views, draw businesses and people from established urban centers, or force towns to spend more on building new infrastructure.

The legislature will again see “smart growth” proposals intended to steer development away from rural areas to places that are already developed. It may see bills to restrict state infrastructure funds to developed areas; strengthen the now largely advisory State Plan of Conservation and Development; better integrate local, regional, and state planning; and provide land use planners with new, more powerful tools to evaluate development patterns.

Property Tax Reform

The legislature will again hear calls to reform the property tax system, which critics claim is an obsolete way to fund municipal services and especially burdensome for middle-income families. Legislators are likely to see tax relief proposals, such as establishing graduated income tax credits for property tax payments. They may also see proposals giving towns other revenue-raising options, including levying local sales or

lodgings taxes or charging impact fees for new developments to pay some of the infrastructure costs normally borne by all property owners.

PUBLIC HEALTH

Smoking

The statewide smoking ban in restaurants and most workplaces went into effect on October 1^,2003 and is scheduled to apply to taverns, cafes, and bowling alleys starting April 1, 2004. Several implementation issues arose as it took effect, including whether it applies to brew pubs, church-run bingo games, and herbal cigarettes and who will enforce it. The legislature could see proposals to fine-tune some provisions as well as proposals from opponents seeking to weaken the law.

PUBLIC HEALTH/HUMAN SERVICES/CHILDREN

Behavioral Health

Three state agencies (Mental Health and Addiction Services, Children and Families, and Social Services) have proposed creating an integrated system to manage and pay for the behavioral health care services the state provides for children, youth, and adults. They contend this new system, which features a single administrative service agency to credential and assist providers, authorize service, and provide intensive care management and member service and a single source for claims payment, will reduce the gridlock, fragmentation, and administrative duplication that the current system creates. The proposal, which arose from the introduction of DCF’s KidCare initiative, was introduced last year, but the legislature did not act on it. It probably will be asked to do so again this session.

TRANSPORTATION

Motor Vehicle Emissions Inspection Program

The state has been without a motor vehicle emissions inspection program for a number of months as it has switched from a centralized to a decentralized system. The new system was supposed to begin operating in September but was delayed until October because of several implementation problems for the contractor. The inspection program generates considerable controversy in that some believe it is unnecessary, but federal law requires it. There are likely to be a number of issues that arise as people get used to the new method of having their vehicle tested. There may be some calls to eliminate the program even though certain sanctions under federal law could result.

Graduated Driver’s Licenses and Other Highway Safety Issues

In 2003, the legislature adopted some additional requirements for 16- and 17-year-old drivers. New requirements for learner’s permits went into effect on October 1, 2003. Certain restrictions on the number of passengers newly licensed 16- and 17-year-olds may transport went into effect on January 1, 2004. Some think these new requirements do not go far enough and there is likely to be interest in adopting additional restrictions such as a nighttime driving prohibition.

Highway safety issues continue to be a high-interest area for the legislature. Among the proposals likely to attract renewed interest in 2004 are initiatives regarding cellphone use while driving and distracted driving, drunk driving, and speeding.

Highway Congestion on the Coastal Corridor and Elsewhere in Connecticut

Highway congestion, particularly along I-95, continues as a high- profile public policy issue. While the Transportation Strategy Board has continued to refine its overall transportation strategy for Connecticut and the legislature has taken some initial steps to identify and pay for projects that may alleviate some congestion, there are many areas yet to be addressed. Funding the identified initiatives becomes particularly critical, both because of constrained state resources and changes in the amount of federal funds that may be available once the multi-year federal transportation authorization legislation is addressed by Congress within the next several months. Keeping the state’s strategy on track and making real improvements in congestion in the Coastal Corridor and Connecticut’s other major transportation corridors will likely provide a number of challenges for the 2004 session.

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