OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-5321

AN ACT ESTABLISHING AN ASIAN PACIFIC AMERICAN AFFAIRS COMMISSION.

AMENDMENT

LCO No.: 6013

File Copy No.: 743

House Calendar No.: 27

Senate Calendar No.: 483

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

All

All Funds - See Below

Municipal Impact:

Municipalities

Effect

All Municipalities

See Below

Explanation

Fund

FY 09 Net Original

FY 09 Net Alternative Budget

Difference

General Fund

17, 073, 023, 475

16, 853, 449, 052

-219, 574, 423

Special Transportation Fund

1, 154, 226, 399

1, 136, 819, 098

-17, 407, 301

Mashantucket Pequot & Mohegan Fund

86, 250, 000

86, 250, 000

0

Soldiers', Sailors', and Marines' Fund

3, 296, 553

3, 296, 553

0

Regional Market Fund

1, 013, 140

1, 013, 140

0

Banking Fund

18, 961, 133

19, 299, 369

338, 236

Insurance Fund

24, 086, 076

24, 505, 211

419, 135

Consumer Counsel & Public Util Control Fund

24, 242, 276

24, 650, 201

407, 925

Workers' Compensation Fund

24, 005, 496

24, 303, 690

298, 194

Criminal Injuries Compensation Fund

2, 625, 000

2, 625, 000

0

All Appropriated Funds

18, 411, 729, 548

18, 176, 211, 314

-235, 518, 234

Summary of Revenue

The table below summarizes the General Fund and Transportation Fund revenue changes as a result of the amendment.

 

Impact

General Fund

 

Tax Changes

-$57.0 million

Revenue Transfers

-132.0 million

Expenditure Related Revenue Changes

81.1 million

Net Impact

-$107.9 million

   

Transportation Fund

 

Tax Changes

-$25.0 million

Revenue Transfers

52.0 million

Net Impact

$27 million

Grants to Towns

Grants to towns would increase by $10.7 million to $2, 916.0 million in FY 09 from the original FY 09 appropriation of $2, 905. 3 million. These figures include the use of FY 07 surplus in FY 09.

Spending Cap

The Alternative Budget FY 09 Budget Revisions, on a net all funds basis, is $356.7 million under the statutory spending cap.

Budget Growth Rate

The budget growth rate, based on OFA adjustments for all appropriated funds, is 3.4% for FY 09 over estimated expenditures for FY 08.

Carry Forward and Budget Implementation Provisions

The budget contains General Fund carry forwards from FY 08 to FY 09 totaling $191.4 million, which reduces any anticipated current year surplus. These and other provisions are detailed below:

Section

Agency

Description

Fiscal Impact

507

Division of Special Revenue

Carries forward up to $350, 000 in funds previously carried forward into FY 09 for a study of legalized gambling and establishes a June 30, 2009 deadline for the study

Carries forward $350, 000

508(a)

Office of Policy and Management

Carries forward up to $100, 000 in Other Expenses from FY 08 into FY 09 for payments to the Connecticut Data Center

Carries forward $100, 000

508(b)

Office of Policy and Management

Carries forward the unexpended balance of funds previously carried forward for Energy Contingency into FY 09

Carries forward an estimated $7.6 million

508(c)

Office of Policy and Management

Carries forward up to $2.9 million in Justice Assistance Grants from FY 08 into FY 09

Carries forward an estimated $2.0M

508(d )

Office of Policy and Management

Carries forward the unexpended balance of funds from FY 08 into FY 09 for Regional Performance Incentive Grants

It is anticipated that there are no funds available to carry forward

508(e)

Office of Policy and Management

Carries forward up to $100, 000 in Distressed Municipalities funds from FY 08 into FY 09 for Smart Growth - Modifications of Connecticut's Land Use Law

Carries forward $100, 000

508(f)

Office of Policy and Management/ State Comptroller

Carries forward up to $1, 550, 000 from FY 08 into FY 09 from PILOT MME and transfers it to the Comptroller for consultants, software and training associated with an Enterprise Performance Management Business Analytical Reporting system

Carries forward $1, 550, 000

508(g)

Office of Policy and Management/ Department of Information Technology

Carries forward the unexpended balance of funds previously carried forward for Licensing and Permitting Fees and transfers it to the Department of Information Technology for E-Government Licensing

 

509

Department of Information Technology

Carries forward the unexpended balance of funds from FY 08 into FY 09 for Internet and Email services for completing the email archiving system

510

Department of Information Technology

Establishes the maximum number of positions that may be filled from the Technical Services Revolving Fund at 200 for FY 09

 

511

Department of Public Works

Carries forward up to $250, 000 from FY 08 to FY 09 for Rents and Moving

Carries forward $250, 000

512

Department of Public Safety

Carries forward up to $535, 000 in funds previously carried forward for helicopter maintenance

Carries forward $535, 000

513(a)

Department of Motor Vehicles

Carries forward up to $300, 000 from FY 08 to FY 09 in Personal Services and transfers it to Other Expenses for costs of implementing security measures in accordance with the federal Real ID Act

Carries forward $300, 000

513(b)

Department of Motor Vehicles

Carries forward up to $150, 000 from FY 08 to FY 09 in Equipment and transfers it to Other Expenses for implementation costs with processing all credit and debit cards in all motor vehicle branches

Carries forward $150, 000

514(a)

Department of Banking

Carries forward up to $750, 000 from FY 08 to FY 09 for Other Expenses for improvements associated with the new office lease

Carries forward $750, 000

514(b)

Department of Banking

Carries forward up to $50, 000 from FY 08 to FY 09 for Other Expenses for Information Technology upgrades

Carries forward $50, 000

514( c)

Department of Banking

Carries forward up to $250, 000 from FY 08 to FY 09 for Equipment and makes it available for improvements associated with the new office lease

Carries forward $250, 000

515(a)

Department of Insurance

Carries forward up to $151, 751 from FY 08 to FY 09 for Personal Services is transferred to Other Expenses for consultants to design a Business Continuity and IT Disaster Recovery Plan

Carries forward $151, 751

515(b)

Department of Insurance

Carries forward up to $150, 000 from FY 08 to FY 09 for Fringe Benefit is transferred to Other Expenses for work on the Connecticut Regulatory Information System

Carries forward $150, 000

516

Department of Labor

Deems $33 million of the amount credited to the state's account in the Unemployment Trust Fund to be deemed appropriated, and directs up to $5 million to be used to improve agency information systems

 

517(a)

Workers' Compensation Commission

Carries forward up to $1.1 million from FY 08 to FY 09 for Other Expenses shall be available for data migration and the Middletown office relocation

Carries forward $1, 100, 000

517(b)

Workers' Compensation Commission

Carries forward up to $70, 000 from FY 08 to FY 09 for Equipment shall be available for the Middletown office phone system and server hardware upgrades

Carries forward $70, 000

518

Workers' Compensation Commission

Carries forward the unexpended balance of funds from FY 08 to FY 09 for Indirect Overhead is transferred to Other Expenses and shall be available for data migration and for the Middletown office relocation

Carries forward $200, 000

519

Department of Environmental Protection

Carries forward the unexpended balance of funds previously carried forward into FY 09 for Lobster Restoration

Carries forward $100, 000

520

Department of Environmental Protection

Permits the Commissioner of DEP to use up to $300, 000 of the Underground Storage Tank Petroleum Clean-Up account within the Environmental Quality Fund to contract for services to evaluate, audit, and repair state-owned underground storage tanks.

 

521

Department of Public Health

Credits $800, 000 to the Newborn Screening Account, and shall be available for expenditure by the department for the purchase and upgrades to the newborn screening technology and for the expenses of the testing

 Increases by $300, 000 amount dedicated to this purpose in FY 09 over current law. Reduces General Fund revenues by $300, 000 in FY 09.

522(a)

Department of Public Health

Carries forward from FY 08 to FY 09 the unexpended balance of funds for the Loan Repayment Program

No impact is anticipated

522(b)

Department of Public Health

Carries forward from FY 08 to FY 09 the unexpended balance of funds for the Nursing Student Loan Forgiveness Program

Carries forward an estimated $125, 000

523

Department of Mental Retardation/ Department of Education

Carries forward up to $500, 000 from FY 08 to FY 09 for Personal Services and transfers it to the Department of Education for School Accountability for the development of secondary math model curricula and a formative assessment plan

Carries forward an estimated $500, 000

524

Department of Mental Retardation/ Regional Community Technical Colleges

Carries forward up to $610, 280 from FY 08 to FY 09 for Personal Services and transfers it to the Regional Community Technical Colleges for Operating Expenses for the development of a nursing program

Carries forward an estimated $610, 280

525

Department of Social Services/ Office of Health Care Access

Carries forward $250, 000 from FY 08 to FY 09 the Other Expenses appropriated to the Department of Social Services and transfers it to the Office of Health Care Access for a study of hospital reimbursement systems

Carries forward $250, 000

526

Department of Social Services/ Office of Health Care Access

Carries forward $100, 000 from FY 08 to FY 09 the Other Expenses appropriated to the Department of Social Services to conduct a study, in consultation with the DSS, DPH and OPM of primary care service capacity and identify geographical or population gaps in access

Carries forward $100, 000

527

Department of Social Services

Carries forward from FY 08 to FY 09 for Other Expenses and transfers it to the HUSKY Outreach to develop a program to educate and inform patients

Carries forward $100, 000

528

Department of Social Services

Carries forward up to $20 million from FY 08 to FY 09 from Medicaid for any settlement agreement in Carr, et al v. Wilson-Coker, DSS Commissioner

Carries forward $20 million

529

Department of Social Services

For FY 09, permits the Commissioner of Social Services, in consultation with the Office of Policy and Management, to increase dispensing fees paid to licensed pharmacies to assist with the transition to the average manufacturer price reimbursement methodology required under the federal Deficit Reduction Act of 2005.

This section results in no fiscal impact.

530(a) (b) (c)

Department of Social Services

Carries forward the unexpended balance of Medicaid funds for costs incurred due to the transition to non-risk contracts under the HUSKY program and recoups FY 08 and FY 09 HUSKY funds from contractors due to the transition to non-risk contracts under the HUSKY program, and makes such funds available under the Medicaid program

The final figure for this carryforward is not known. The department has indicated that this carryforward could be up to $60 million.

531

University of Connecticut Health Center/ Office of Policy and Management/ Department of Social Services

Permits up to $5, 000, 000 in FY 09 appropriations to the UCHC to be transferred by OPM to DSS for Disproportionate Share - Medical Emergency Assistance to maximize federal reimbursement

Allows for federal revenue maximization

532

Department of Veterans' Affairs/ Office of Policy and Management/ Department of Social Services

Permits any FY 09 appropriation, or portion thereof, made to the Department of Veterans' Affairs to be transferred by OPM to DSS for Disproportionate Share - Medical Emergency Assistance to maximize federal funds

 Allows for federal revenue maximization

533

Department of Social Services

Increases from $11 to $12 million the amount transferred from the Tobacco Health Trust Fund to the Department of Social Services for the implementation and administration of the Charter Oak Health Plan

Reduces principle of the Tobacco and Health Trust Fund by $1 million in FY 09. Under current law, the balance in the fund would be $28.1 million as of 6/30/09. It should be noted that a $1million transfer from the fund to DSS for the CHOICES program is repealed within section 593 of the amendment below.

534(a)

Department of Education

Carries forward up to $150, 000 from FY 08 into FY 09 for Other Expenses for expenditure on a family resource center study

Carries forward an estimated $150, 000

534(b)

Department of Education

Carries forward up to $100, 000 from FY 08 to FY 09 for Priority School Districts for the secondary school reform costs study

Carries forward an estimated $100, 000

535

Department of Higher Education

Permits up to $152, 000 in funds appropriated for Alternate Route Certification in FY 09 to be used for other expenses in support of he current operation of the Alternate Route to Certification program

 

536

Department of Correction

Carries forward up to $750, 000 from FY 08 to FY 09 for Inmate Medical Services

 

537

State Treasurer- Debt Service

Carries forward up to $13 million from FY 08 to FY 09 for Debt Service

Carries forward an estimated $13, 000, 000

538

State Comptroller - Fringe Benefits

Carries forward the unexpended balance of funds appropriated from the FY 07 anticipated surplus for Other Post Employment Benefits from FY 08 into FY 09

Carries forward an estimated $10 million

539

Department of Environmental Protection

Carries forward up to $450, 000 in fund previously carried forward for Beach Erosion

Carries forward an estimated $450, 000

540

Department of Education

Carries forward the unexpended balance of funds appropriated for After School Funds

Estimated amount carried forward is $2, 600, 000

541(a)

State Library

Carries forward the unexpended balance of funds for Computer Access

Estimated amount carried forward is $200, 000

541(b)

State Library

Carries forward the unexpended balance of funds from the FY 07 surplus for the Arts Inventory into FY 09

Estimated amount carried forward is $75, 000

542(a)

Department of Mental Health and Adaptation Services

Carries forward the unexpended balance FY 07 surplus funds for Grants to Substance Abuse Services and makes them available in FY 09 for Mercy Housing and Shelter

 Carries forward an estimated $200, 000

542(b)

Department of Mental Health and Adaptation Services

Directs up to $1.1 million for the Pre-Trial Alcohol Substance Abuse Program be available for the Regional Action Councils in FY 09

Implements a provision of the budget

543

Office of Policy and Management

For FY 09, specifies that certain residential care private providers serving DCF clients shall be receive a cost of living adjustment from OPM

Implements a provision of the budget

544

CSU

Carries forward up to $500, 000 in Operating Expenses for the Institute for the Study of Crime and Justice

Carries forward an estimated $500, 000

545

Commission on Human Rights and Opportunities

Carries forward up to $150, 000 from FY 08 into FY 09 in Other Expenses for a disparity study

Carries forward an estimated $150, 000

546(a)

Office of Legislative Management

Carries forward up to $97, 000 for Redistricting from FY 08 into FY 09

Carries forward an estimated $97, 000

546(b )

Office of Legislative Management

Carries forward up to $950, 000 in Minor Capital Improvement from FY 08 to FY 09

Carries forward an estimated $950, 000

546(c)

Office of Legislative Management

Carries forward up to $550, 000 in Other Expenses from FY 08 to FY 09 for House Chamber Voting Boards

Carries forward an estimated $550, 000

547

Office of State Ethics

Carries forward up to $413, 000 in Information Technology Initiatives from FY 08 to FY 09

Carries forward an estimated $413, 0000

548

Office of Policy and Management/ Department of Economic and Community Development

Carries forward up to $428, 500 in Other Expenses funding previously carried forward to prevent base closure is carried forward and transferred to the Office of Military Affairs within the Department of Economic and Community Development

Carries forward an estimated $428, 500

549

Department of Transportation

Carries forward up to $750, 000 in SE CT Intermodal Transportation Center funds from FY 08 to FY 09

Carries forward an estimated $750, 000

550

Department of Higher Education

Carries forward up to $100, 000 for Other Expenses from FY 08 to FY 09 and transfers it to Opportunities in Veterinary Medicine

Carries forward an estimated $100, 000

551

Department of Economic and Community Development

Carries forward the unexpended balance of funds for the Main Street Initiatives from FY 08 to FY 09

Estimated amount carried forward is $80, 000

552

Department of Administrative Services

Carries forward $62, 900 in Personal Services from FY 08 to FY 09 and transfers to the Correctional Ombudsman

Estimated amount carried forward is $62, 900

553

State Comptroller

Carries forward up to $365, 000 for Personal Services from FY 08 to FY 09

Carries forward and estimated $365, 000

554

Various

Directs OPM to transfer funds appropriated to the Private Providers account for a 1% cost of living adjustment

Implements a provision of the budget

555(a)

Department of Public Health

Carries forward up to $1.5 million in Community Health Services from FY 08 to FY 09

Carries forward an estimated $1, 500, 000

555 (b)

Department of Public Health

Carries forward up to $1.5 million in School Based Health Clinics from FY 08 to FY 09

Carries forward an estimated $1, 500, 000

555(c )

Department of Public Health

Carries forward the unexpended balance of funds made available for various projects to the Department of Public Health from the Tobacco and Health Trust Fund for asthma, disease prevention and health promotion into FY 09

 

556

Department of Social Services

Carries forward the unexpended balance of funds made available to the Department of Social Services from the Tobacco and Health Trust Fund for the Charter Oak Plan from FY 08 to FY 09

 Carries forward an estimated $1, 500, 000

557

Military Department

Carries forward the unexpended balance of Veteran's Service Bonus funds from FY 08 to FY 09

Estimated amount carried forward is $525, 000

558

Department of Social Services

Establishes a reporting requirement on the status of implementation of the biennial programmatic changes and the HUSKY Plans transition

 Carries forward an estimated $1, 500, 000

559

Department of Higher Education

Carries forward up to $200, 000 for ECE-Collaboration with Higher Ed from FY 08 to FY 09

Carries forward an estimated $200, 000

560

Office of Legislative Management

Carries forward up to $15, 000 in FY 07 surplus funds for the Connecticut Academy of Science and Engineering from FY 08 to FY 09

Carries forward an estimated $15, 000

561

Department of Education

Carries forward up to $880, 000 for the Early Childhood Advisory Cabinet from FY 08 to FY 09

Carries forward an estimated $880, 000

562

Department of Insurance

Carries forward up to $45, 000 of Personal Services funds which have previously been carried forward and transfers it to Other Expenses for FY 09 for phone system programming

Carries forward an estimated $45, 000

563

Department of Education

Carries forward up to $50, 000 of Other Expenses to FY 09 for the Child Poverty Council

Carries forward an estimated $50, 000

564

Secretary of the State

Carries forward up to $70, 000 of Other Expenses funds to FY 09 for the preparation and publication of the State Register and Manual

Carries forward an estimated $70, 000

565

Department of Information Technology

Carries forward up to $225, 000 in Other Expenses for Portal Web Content Management System

Carries forward an estimated $225, 000

566

Department of Social Services

Carries forward up to $100, 000, 000 of the Medicaid funds from FY 08 to FY 09 for provider rate increases

Carries forward an estimated $100, 000, 000

567

Department of Administrative Services

Carries forward $237, 100 from Personal Services from FY 08 to FY 09 and transfers it to Other Expenses

Carries forward an estimated $237, 100

568

State Treasurer

Carries forward up to $85 million in FY 07 surplus funds used to defeasance of the ECLM Clean Energy bonds to FY 09

 

569

Department of Economic and Community Development

Carries forward up to $10 million of funds for the State Assisted Housing Sustainability Fund to FY 09

Carries forward an estimated $10 million

570

Department of Economic and Community Development

Carries forward the unexpended balance of funds for Southeast CT Marketing Plan from FY 08 to FY 09

Carries forward an estimated $100, 000

571

Comptroller

Directs the Comptroller to designate $80 million of the resources of the General Fund for the FY 07 to FY 09

 

572(a)

Department of Social Services

Carries forward a total of $7, 857, 140 from Other Expenses to FY 09 as follows: $1, 460, 000 for information technology consultants related to Raymond v. Rowland; $1, 395, 140 for physical facility improvements to implement requirements of Raymond v. Rowland; $2, 557, 000 for information technology hardware and support to implement Raymond v. Rowland; $500, 000 for an on-line client application system; $375, 000 for a fall prevention program.

Carries forward an estimated $7, 857, 140

572(b)

Department of Social Services

Carries forward up to $570, 258 in HUSKY funds from FY 08 to FY 09 for Managed Care Organization payment delays for the HUSKY B program

Carries forward an estimated $570, 258

572(c ) (1)

Department of Social Services

Carries forward up to $23, 058, 474 for Managed Care Organization Payment delays for the HUSKY A program

Carries forward an estimated $23, 058, 474

572(c ) (2)

Department of Social Services

Carries forward up to $4.5 million for grants to federally qualified health centers

Carries forward an estimated $4, 500, 000

572(d)

Department of Social Services

Carries forward up to $390, 000 in funds previously carried forward for Hospital Hardship to FY 09 for monthly distributions to Charlotte Hungerford Hospital through September 30, 2008

Carries forward an estimated $390, 000

572(e)

Department of Social Services

Carries forward up to $750, 000 for Elderly Services to FY 09 to be used as follows: Up to $500, 000 for Senior Centers; and up to $250, 000 for Elderly Case Management for Municipalities.

Carries forward an estimated $750, 000

572(f)

Department of Social Services

Carries forward up to $75, 000 for Nutrition Assistance to FY 09 for the New Britain Food Pantry

Carries forward an estimated $75, 000

572(g)

Department of Social Services

Carries forward up to $2, 280, 500 for Housing Homeless Services to FY 09 to be used as follows: up to $100, 000 for Beyond Shelter Services; up to $150, 000 for child care services in shelters; up to $238, 000 for the Connecticut Women's Consortium; $86, 250 for a grant to study homelessness among veterans in Middlesex county; $56, 250 for New Haven End Homelessness; $900, 000 for counselors for homeless shelters; and $750, 000 for AIDS housing.

Carries forward an estimated $2, 280, 500

572(h)

Department of Social Services

Carries forward up to $102, 500 for School Readiness funds for FY 09 for licensing issues with the Solar Youth and Skills Camp

Carries forward an estimated $102, 500

572(i)

Department of Social Services

Carries forward up to $1, 221, 250 for Community Services to FY 09 to be used as follows: up to $50, 000 for the Jewish Federation for Citizenship Training; up to $75, 000 to the Westrock Neighborhood Corporation; up to $300, 000 for New Samaritan; up to $131, 250 for Patient Navigator; up to $265, 000 for Asset Building; up to $250, 000 for elderly transportation; and up to $150, 000 for a program for grandparents.

Carries forward an estimated $1, 221, 250

572(j)

Department of Social Services

Carries up to $500, 000 for Human Services Infrastructure Community to FY 09 for Community Action Programs

Carries forward an estimated $500, 000

572(k)

Department of Social Services

Carries forward up to $100, 000 for Teen Pregnancy Prevention to FY 09 for such purposes

Carries forward an estimated $100, 000

573

Department of Social Services

Upto $82 million of federal funds received by the Department of Social Services during FY 08 for expenditures for Managed Care Organization payment delays for the HUSKY program or for costs related to implementing Medicaid provider rate increases is deemed received in FY 09

Ensures that revenue assumed for FY 09 is received in FY 09

574

Various

Requires that agencies pay private providers within 45 days of request for payment or the agency will pay the private provider an additional 15% annual interest.

Under normal practice, no fiscal impact. If agencies are late in payment, an indeterminate cost will result due to the 15% interest.

575

Department of Transportation

Requires the department to establish a fuel cell program

 

576(a) (b)

Department of Environmental Protection

Requires the Department of Environmental Protection, to provide a grant, within available appropriations, to the City of Norwalk's Department of Public Works in consultation with the towns of Darien and New Canaan to study the Five Mile River, Stoney Brook, and Goodwives Creek  portions of the Norwalk River Watershed and develop a watershed and flood management plan and report such findings by January 1, 2009.

Implements a provision of the budget, which contains $200, 000 in the Department of Environmental Protection

577-579

Court Support Services Division (CSSD) of the Judicial Department; Department of Public Safety

Effective October 1, 2008, requires the taking of DNA samples, prior to sentencing, from any person convicted of a class A or class B felony.

Implements a provision of the budget, which contains $96, 375 in the Judicial Department to take DNA samples and $34, 900 in the Department of Public Safety to analyze DNA samples.  The FY 10 cost of the bill's changes are: $128, 500 to the Judicial Department; and $46, 500 to the Department of Public Safety

580

Department of Social Services

Requires the Commissioner of Social Services to amendment the state Medicaid plan to include hospice services as an optional service covered under the Medicaid program

No fiscal impact

581

Various

Establishes the Early Retirement Incentive Program (ERIP)

Results in anticipated FY 09 General Fund savings of $163.1 million

582

Various

Specifies that up to 100% of positions vacated by the Department of Correction, the Department of Public Safety and faculty at a constituent unit of higher education as a result of ERIP may be refilled

This section will mitigate the General Fund ERIP savings ($163.1M in FY 09) anticipated in the budget

583

Various Municipalities

Permits a municipality to establish a local property tax relief for program for persons aged 65 years or older who volunteer their services for certain organizations, up to $750

Municipalities that adopt this ordinance will experience a revenue loss which will likely necessitate a minimal increase to their mill rate or modifications to their budget to offset this loss.

584

Auditors of Public Accounts

Permits the Auditors to audit municipalities that receive more than 35% of their funding from state funding.

Implements a provision of the budget, which contains $500, 000 in the Auditors of Public Accounts for this purpose

593-594

Repealer

Repeals the FY 09 transfer of $1 million transfer from the Tobacco and Health Trust Fund to the Department of Social Services for the CHOICES program; additionally it repeals the transfer of funds from the Office of Policy and Management to the Department of Environmental Protection for the Water Planning Council; and repeals the transfer of $17, 065, 577 from the PILOT Manufacturing Machinery and Equipment account to FY 09 to implement the provisions of PA 08-1, JSS

 

585 & 586 – JOB CREATION TAX CREDITS

Fiscal Impact

The amendment is anticipated to result in General Fund revenue loss of $2.5 million per year beginning in FY 09.

To the extent that applications for the credits significantly increase due to the specified expansions, the Department of Economic and Community Development (DECD) will require additional personnel (annual salary of $65, 000 and full fringe benefits of $38, 100) to review and process applications and to monitor credit approval and compliance.

The amendment is also expected to result in the following costs to the Department of Revenue Services: (1) a one-time cost of $200, 000 for systems development and computer programming in FY 09 and (2) an ongoing cost of approximately $275, 000 per year beginning in FY 09 to process claims.

Summary

The state offers tax credits against the corporation, insurance premium, and utility company taxes to companies that create at least 10 new full-time jobs in the state. The maximum credit is 60% of the state income tax withheld from each new employee's wages for up to five successive years.

This amendment:

1. extends the job creation tax credit against the corporation, utility, and insurance premium taxes to any company that creates at least one, rather than a minimum of 10, new full-time job in the state;

2. establishes a similar credit against the personal income tax, thus allowing entities that are not subject to the corporation, utility or insurance premium taxes, such as partnerships, S corporations, and limited liability companies, to take advantage of the credit; and

3. increases the limit on total aggregate credits from $10 million to $12.5 million per year and applies the limit to the total credits against the both personal income and business taxes.

The amendment also eliminates the current procedure for claiming annual credits through the Department of Economic and Community Development (DECD) commissioner and instead subjects credit claims on tax returns to regular Department of Revenue Services' (DRS) corporation and personal income tax audit and deficiency assessment requirements. Current law requires the DECD commissioner to issue allocation notice when she approves an application for a credit. Within 30 days of the end of the taxpayer's income year, the taxpayer must give the commissioner information about the number of new jobs created during the year and the income taxes withheld from the new employees' wages for the year. The commissioner must, within 60 days after the close of the taxpayer's income year or 30 days after the taxpayer provides the required information, whichever comes first, issue an eligibility certificate that includes the taxpayer's name, number of new jobs created, and the amount of the credit for the year. Upon request, the commissioner must give the DRS Commissioner a copy of the eligibility certificate.

The amendment retains the current procedure for applying for the business tax credits through the DECD commissioner and extends the same application requirements to the personal income tax credit. It retains the existing credit recapture provisions for situations when the number of credit-eligible new employees decreases in the four successive years after the year the business or person first claimed the credit.

Finally, the amendment eliminates the DECD commissioner's authority to combine approval of a job creation credit application with the exercise of her other powers, including offering other forms of economic development assistance.

EFFECTIVE DATE: July 1, 2008 and applicable to income and tax years starting on or after January 1, 2008.

587 – BUSINESS ENTITY TAX

Fiscal Impact

The amendment is anticipated to result in a General Fund revenue loss to the Business Entity Tax of $17.5 million in FY 09 and $35 million per year beginning in FY 10.

Summary

The amendment reduces the business entity tax from $250 to $125 for 2008 tax year and eliminates it entirely for tax years starting on or after January 1, 2009.

Under current law, the tax is $250 per year and applies to any Connecticut or out-of-state S corporation, limited liability company, limited liability partnership, or limited partnership that is required to register with the secretary of the state before transacting business in Connecticut.

EFFECTIVE DATE: July 1, 2008 and applicable to tax years starting on or after January 1, 2008.

588 &589 – ESTATE AND GIFT TAXES

Fiscal Impact

The amendment is anticipated to result in a General Fund revenue loss to the Unified Gift and Estate of $12 million in FY 09, $26.5 million in FY 10, and $30 million per year beginning in FY 11.

Summary

The amendment phases out the “cliff” in the estate and gift taxes affecting estates and gifts valued at over $2 million. Under current law, an estate or gift valued at $2 million or less is not taxed while the full value of any estate or gift valued more than $2 million is taxable. This structure produces a “cliff” in which a $1 increase in the value of a gift or estate from $2, 000, 000 to $2, 000, 001 increases its tax from zero to $106, 800. The bill phases out the cliff over two years, reducing it by 50% for deaths occurring and gifts made between January 1, 2008 and December 31, 2008 and eliminating it starting with such events occurring on or after January 1, 2009.

Current and proposed tax rates are shown in the table below. The proposed rates apply to deaths occurring on or after January 1, 2008. The new gift tax rates apply to gifts made on or after January 1, 2008 and cover the aggregate gifts a donor makes on or after January 1, 2005, with a credit allowed for any state gift tax the donor previously made on such gifts.

CURRENT AND PROPOSED ESTATE AND GIFT TAXES

VALUE OF GIFT

OR ESTATE

CURRENT TAX

(Add cols.

C & D)

PROPOSED TAX

(Add cols.

E-1 or E-2 & F)

Col. A:

Over

Col. B:

But not over

Col. C:

Tax on

Col. A

Col. D:

Tax rate on

excess

over Col. A

Col. E-1:

Tax on

Col. A

(Deaths occurring and gifts made January 1, 2008 – December 31, 2008)

Col. E-2:

Tax on

Col. A

(Deaths occurring and gifts made on or after January 1, 2009)

Col. F:

Tax rate on

excess

over Col. A

0

$2, 000, 000

NO TAX

NO TAX

NO TAX

$2, 000, 000

2, 100, 000

5.085% of the excess over 0

$50, 900

0

5.085% of the excess over $2, 000, 000

2, 100, 000

2, 600, 000

$106, 800

8.0%

56, 000

$5, 100

8.0%

2, 600, 000

3, 100, 000

146, 800

8.8%

96, 000

45, 100

8.8%

3, 100, 000

3, 600, 000

190, 800

9.6%

140, 000

89, 100

9.6%

3, 600, 000

4, 100, 000

238, 800

10.4%

188, 000

137, 000

10.4%

4, 100, 000

5, 100, 000

290, 800

11.2%

240, 000

189, 100

11.2%

5, 100, 000

6, 100, 000

402, 800

12.0%

352, 000

301, 100

12.0%

6, 100, 000

7, 100, 000

522, 800

12.8%

472, 000

421, 100

12.8%

7, 100, 000

8, 100, 000

650, 800

13.6%

600, 000

549, 100

13.6%

8, 100, 000

9, 100, 000

786, 800

14.4%

736, 000

685, 100

14.4%

9, 100, 000

10, 100, 000

930, 800

15.2%

880, 000

829, 100

15.2%

Over $10, 100, 000

1, 082, 800

16.0%

1, 032, 000

981, 100

16.0%

EFFECTIVE DATE: July 1, 2008. The estate tax changes apply to estates of decedents who die, and the gift tax changes apply to calendar years starting, on or after January 1, 2008.

590 – TEMPORARY REDUCTION IN MOTOR FUEL TAX

Fiscal Impact

The amendment is anticipated to result in a one-time Transportation Fund revenue loss to the motor Fuels Tax of $25 million in FY 09. It should be noted that Section 593 of the amendment transfers an additional $55 million from the General Fund to the Transportation Fund to accommodate this policy change.

Summary

From midnight on July 1, 2008 to 11: 59 p.m. on September 1, 2008, the amendment reduces the motor fuel tax rates by 10 cents per gallon. It applies to taxes on gasoline, gasohol, diesel, and other motor vehicle fuels.

During the two-month period, the amendment reduces the per-gallon tax on gasoline and gasohol from 25 cents to 15 cents, the tax on propane and natural gas from 26 cents to 16 cents, and the tax on diesel to 10 cents below the amount determined by the DRS commissioner starting July 1, 2008.

EFFECTIVE DATE: July 1, 2008

591 – PETROLEUM PRODUCTS GROSS EARNINGS TAX CHANGES

Fiscal Impact

The amendment is anticipated to result in a General Fund revenue loss to the Petroleum Products Gross Earnings Tax of $25 million per year beginning in FY 09 and $55 million beginning in FY 14.

The amendment will also preclude a General Fund revenue gain, which could be significant, if the wholesale price of fuel exceeds the $2.55 cap.

Summary

Tax Rate

The amendment eliminates increases in the petroleum products gross earnings tax rate scheduled to take effect on July 1, 2008 and July 1, 2013. It freezes the tax at the current 7% rate. Under current law, the tax rate is scheduled to increase to 7.5% on July 1, 2008 and 8.1% starting July 1, 2013.

Tax Base

The percentage tax rate specified above applies to the gross earnings distributors receive from the first sale of covered petroleum products in Connecticut. For purposes of liability for the tax, the amendment caps these gross earnings at $2.55 per gallon.

EFFECTIVE DATE: July 1, 2008

592 – PETROLEUM PRODUCTS GROSS EARNINGS TAX REVENUE TRANSFERS TO THE SPECIAL TRANSPORTATION FUND

Fiscal Impact

The amendment increases the annual transfers of petroleum products gross earnings tax revenue from the General Fund to the Special Transportation Fund by $55.0 million per year starting with FY 09. This will result in a revenue loss to the General Fund and revenue gain to the Transportation Fund of $55.0 million beginning in FY 09.

Summary

The law requires the comptroller to transfer a specified amount of revenue from the petroleum products gross earnings tax each quarter from the General Fund to the STF. The amendment increases the total of these quarterly transfers by $55 million per year as shown below. The increased revenue transfers start in FY 09.

Fiscal Year

Annual Revenue Transfer

Current

(millions)

Proposed

(millions)

2008

$127.8

No change

2009

141.9

$196.9

2010

141.9

196.9

2011

165.3

220.3

2012

165.3

220.3

2013

165.3

220.3

2014 and after

179.2

234.2

EFFECTIVE DATE: July 1, 2008

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose.