AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE LEGISLATIVE PROGRAM REVIEW AND INVESTIGATIONS COMMITTEE RELATING TO CONNECTICUT'S TAX SYSTEM.

OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 ¯ (860) 240-0200

http: //www. cga. ct. gov/ofa

sHB-5491

AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE LEGISLATIVE PROGRAM REVIEW AND INVESTIGATIONS COMMITTEE RELATING TO CONNECTICUT'S TAX SYSTEM.

Agency Affected	Fund-Effect	FY 07 $	FY 08 $
Policy & Mgmt. , Off.	GF - Cost	70,000	70,000
Department of Revenue Services	GF - Cost	375,000	375,000
Department of Revenue Services	GF - Cost	500,000	None
Comptroller Misc. Accounts (Fringe Benefits)	GF - Cost	15,340	37,895

Municipalities	Effect	FY 07 $	FY 08 $
All Municipalities	STATE MANDATE - Cost	See Below	See Below

Explanation

Sections 1, 4 & 5 are a mandate on municipalities, as they require municipalities to prepare and report certain information to the Office of Policy and Management (OPM). Municipalities already collect information on the use of local option property tax exemptions, thus providing it to OPM is not expected to result in a cost. Requiring municipalities to assess the accuracy and uniformity of local revaluations using standards already developed pursuant to CGS 12-62i is not expected to result in a cost. However, depending upon how local assessors collect and organize information, certain municipalities may experience a cost to determine information on trends in local property values and taxes such as average and median single family tax bills and the per cent change over time. These costs are unknown, and would result in an unfunded state mandate.

OPM will incur costs and require one additional staff person with a starting salary of $65,000 and associated other expenses of $5,000 to develop the forms to collect such data, aggregate it, analyze it and incorporate it into the report. The budget bill, sHB 5007, as favorably reported by the Appropriations Committee on March 30, 2006 contains funding for three additional positions; it is uncertain whether funds would be used for this purpose as the agency is currently assessing how to most effectively utilize these positions.

Sections 2, 3, and 6 through 9 of the bill are estimated to require 5 new positions for DRS for a total of approximately $375,000 per year in personnel related expenses. In addition, the sections will require a one time cost to DRS of approximately $500,000 to make modifications to DRS's integrated tax administration system (ITAS).

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.