OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sSB-80

AN ACT CONCERNING ELECTRONIC UNEMPLOYMENT COMPENSATION PAYMENTS.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 10 $

FY 11 $

Labor Dept.

UCF - Revenue Gain

15, 125

30,250

Note: UCF=Unemployment Compensation Fund

Municipal Impact: None

Explanation

The bill requires the electronic payment of unemployment taxes, starting the first calendar quarter of FY 10, by all employers with 100 or more employees who pay unemployment compensation taxes, or make payments in lieu of taxes.

The bill will result in additional revenue to the fund based on increased interest earnings. Due to the fact that payments will be received earlier because of decreased processing time, it is estimated that such payments will accrue interest for seven additional days each quarter. Based on the FY 08 tax bills of employers who would now make electronic payments, the interest earned is estimated to be $15, 125 in FY 10 and $30,250 in FY 11.

Background

PA 08-60, “AAC Electronic Unemployment Compensation Tax Payments,” required employers with 250 or more employees to pay electronically.

The Out Years

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