OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-1801

AN ACT CONCERNING THE STATE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2011, AND MAKING APPROPRIATIONS THEREFOR.

AMENDMENT

LCO No.: 9517

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

The amendment strikes the underlying bill and its associated fiscal impact. The amendment makes appropriations, includes a revenue schedule and contains other provisions as identified further below. The table below identifies the appropriations and revenue for all appropriated funds contained in the amendment.

FUND BALANCE

 

FY 10 $

FY 11 $

General Fund

   

Revenue

16, 930, 600, 000

17, 303, 400, 000

Appropriations

16, 929, 812, 446

17, 302, 630, 259

Difference

787, 554

769, 741

Transportation Fund

   

Revenue

1, 080, 800, 000

1, 140, 400, 000

Appropriations

1, 080, 683, 806

1, 140, 222, 694

Difference

116, 194

177, 306

Mashantucket Pequot and Mohegan Fund

   

Revenue

86, 300, 000

86, 300, 000

Appropriations

86, 250, 000

86, 250, 000

Difference

50, 000

50, 000

Soldiers, Sailors and Marines Fund

   

Revenue

2, 700, 000

2, 700, 000

Appropriations

2, 639, 788

2, 639, 799

Difference

60, 212

60, 201

Regional Market Operations Fund

   

Revenue

1, 000, 000

1, 000, 000

Appropriations

64, 350

83, 524

Difference

935, 650

916, 476

Banking Fund

   

Revenue

22, 100, 000

20, 100, 000

Appropriations

19, 641, 148

20, 073, 086

Difference

2, 458, 852

26, 914

Insurance Fund

   

Revenue

24, 200, 000

25, 100, 000

Appropriations

24, 173, 742

25, 063, 360

Difference

26, 258

36, 640

Consumer Counsel & Public Utility Fund

   

Revenue

21, 300, 000

22, 000, 000

Appropriations

21, 297, 093

21, 919, 548

Difference

2, 907

80, 452

Workers' Compensation Fund

   

Revenue

22, 600, 000

23, 000, 000

Appropriations

22, 521, 463

22, 994, 879

Difference

78, 537

5, 121

Criminal Injuries Compensation Fund

   

Revenue

2, 700, 000

2, 700, 000

Appropriations

2, 625, 000

2, 625, 000

Difference

75, 000

75, 000

Sections 1 - 20

FY 10 All Funds Appropriations

Fund

FY 10 Gross Appropriations

Less: Lapse & Other Reductions

FY 10 Net Appropriations

General Fund

$17, 376, 549, 638

($446, 737, 192)

$16, 929, 812, 446

Transportation

1, 101, 911, 785

(21, 227, 979)

1, 080, 683, 806

Banking

19, 641, 148

 

19, 641, 148

Insurance

24, 173, 742

 

24, 173, 742

Consumer Counsel & Public Util.

21, 297, 093

 

21, 297, 093

Workers' Compensation Fund

22, 521, 463

 

22, 521, 463

Mash. Pequot & Mohegan

86, 250, 000

 

86, 250, 000

Soldiers, Sailors and Marines'

2, 639, 788

 

2, 639, 788

Regional Market

64, 350

 

64, 350

Criminal Injuries Comp.

2, 625, 000

 

2, 625, 000

TOTAL

$18, 657, 674, 007

($467, 965, 171)

$18, 189, 708, 836

FY 11 All Funds Appropriations

Fund

FY 11 Gross Appropriations

Less: Lapse & Other Reductions

FY 11 Net Appropriations

General Fund

$17, 833, 990, 729

($531, 360, 470)

$17, 302, 630, 259

Transportation

1, 161, 636, 222

(21, 413, 528)

1, 140, 222, 694

Banking

20, 073, 086

 

20, 073, 086

Insurance

25, 063, 360

 

25, 063, 360

Consumer Counsel & Public Util.

21, 919, 548

 

21, 919, 548

Workers' Compensation Fund

22, 994, 879

 

22, 994, 879

Mash. Pequot & Mohegan

86, 250, 000

 

86, 250, 000

Soldiers, Sailors and Marines'

2, 639, 799

 

2, 639, 799

Regional Market

83, 524

 

83, 524

Criminal Injuries Comp.

2, 625, 000

 

2, 625, 000

TOTAL

$19, 177, 276, 147

($552, 773, 998)

18, 624, 502, 149

Spending Cap

The appropriations on an all funds basis, is under the spending cap by $1, 324.1 million in FY 10, and $406.5 million in FY 11.

Growth Rate

The adjusted growth rate for all appropriated funds is -3.7% in FY 10 and 2.9% in FY 11. Adjustments include carry forward funding anticipated to be expended in each fiscal year and the shifting of costs to and from other funds or fiscal years.

Sections 21 - 49 identified in the table below:

Section

Agency

Description

21

SDE/DDS

Permits $1 million of federal IDEA funds to be transferred to DDS for the Birth-to-Three Program in FY 10 & FY 11.

22

SDE

Up to $300, 000 is available for spending by WACE Technical Training Center under Adult Education Grant.

Impact: Technical change in order to distribute funding.

23a

SDE

Distributes $116, 721, 188 in priority school district grants for FY 10.

23b

SDE

Distributes $116, 721, 188 in priority school district grants for FY 11.

24

DHE

The amount of funds available for expenditure from the student protection account shall be $245, 000 in FY 10 & $257, 000 in FY 11.

25

DMV

Carries forward the unexpended balance of funds for Commercial Vehicle Information System and Networks Projects for FY 10 & FY 11.

Impact: Estimated amount carried forward in the Transportation Fund is $189, 000.

26a

DMV

Carries forward the unexpended balance of funds for DMV's registration & drivers license data processing systems for FY 10 & FY 11.

Impact: Estimated amount carried forward to Transportation Fund is $1, 205, 000.

26b

DMV

Up to $7 million of the unexpended balance of funds previously appropriated to DOT for Personal Services; is carried forward and transferred to the DMV license plate account for registration & drivers license data system for FY 10 & FY 11.

Impact: Estimated amount carried forward in the Transportation Fund is $7, 000, 000.

26c

DMV

Up to $8.5 million of the unexpended balance of funds previously appropriated for Debt Service is carried forward and transferred to the DMV license plate account for registration and license data system for FY 10 & FY 11.

Impact: Estimated amount carried forward in the Transportation Fund is $8, 500, 000.

27a

DOB

Carries forward up to $750, 000 Other Expenses funds for the Department of Banking new office lease improvements for FY 10.

Impact: Estimated amount carried forward is $750, 000.

27b

DOB

Carries forward up to $250, 000 Department of Banking Equipment for new office lease improvements for FY 10.

Impact: Estimated amount carried forward is $250, 000.

28

OPM/RSA

Permits transfers from agencies to the Reserve for Salary Adjustments (RSA) account.

29

OPM/RSA

The unexpended FY 09 balance of funds related to collective bargaining is carried forward into FY 10 and FY 11.

Impact: Estimated amount carried forward is $27.2 million in General Fund and $9.8 million in Transportation Fund.

30

OPM

Carries forward unexpended balance of Other Expenses funds for a health care and pension consulting contract into FY 10 & FY 11.

Impact: Estimated amount to be carried forward is $180, 000.

31

OPM

Up to $250, 000 of the unexpended balance of funds in Other Expenses is carried forward to prevent base closures into FY 10.

32

OPM/DOIT

Carries forward unexpended funds from OPM and transfers these funds to DOIT to implement a common Licensing/Permit issuance service for state agencies in FY 10.

Impact: Estimated amount carried forward is $752, 741.

33

OPM

Carries forward the unexpended balance of funds for the Criminal Justice Information System into FY 10.

Impact: Estimated amount carried forward is $1, 900, 000.

34

DOL

$30 million of the amount credited to the Unemployment Trust Fund is deemed to be appropriated to the Department of Labor for administrative infrastructure in FY 10 & FY 11.

35

DPH

Increases from $500, 000 to $800, 000 the amount collected pursuant to CGS 19a-55 to be credited to the newborn screening account for technology upgrades and testing expenses in FY 10 and FY 11.

Impact: A corresponding General Fund revenue loss of $300, 000 will result.

36

DPH

Up to $200, 000 from the Stem Cell Research Fund is made available to DPH for administrative expenses in FY 10 & FY 11.

37

DMHAS

Up to $600, 000 from Pre-Trial Alcohol Substance Abuse Program is made available for Regional Action Councils in FY 10 and FY 11.

38

DMHAS

Up to $510, 000 from Pre-Trial Alcohol Substance Abuse is made available for Gov's Partnership to Protect CT's Workforce in FY 10 and FY 11.

39

DSS/DMHAS

Directs DSS to make Disproportionate Share (DSH) payments to hospitals in DMHAS for operating expenses and related fringe benefits. This allows DSS to maximize federal revenue under DSH & other federal matching programs but does not alter the intent of the original appropriation of funds.

40

UCHC/DSS

Permits UCHC appropriations to be transferred to DSH - Medical Emergency Assistance account within DSS to maximize federal reimbursement.

41

DVA/DSS

Permits DVA appropriations to be transferred to the DSH - Medical Emergency Assistance account within DSS to maximize federal reimbursement.

42a

OPM/All

Personal Services holdbacks - $14 million in expenditures for Personal Services for FY 10 & FY 11.

42b

OPM/All

Other Expenses holdbacks - $11 million in expenditures for Other Expenses for FY 10 & FY 11.

42c

OPM/All

Contracts and Personal Services Agreements reduction - $95 million in expenditures for contracts & personal service agreements for FY 10 & FY 11.

43

Various

Permits the Governor to modify or reduce allotments to achieve Personal Services savings included in the budget.

44

DAS

Limits the total number of positions to 124 that may be filled by DAS from the General Services Revolving Fund.

45

Various

Any General Fund appropriation may be transferred between agencies with FAC approval in order to maximize federal reimbursement.

46

Various

Permits any General Fund appropriation to be adjusted by the Governor to maximize federal funding. A plan must be submitted by the Governor.

47

DSS

Directs DSS to establish a receivable for anticipated federal reimbursement from the development of a data warehouse in FY 10 & FY 11.

48

DSS

Permits DSS to make advance payments to nursing home facilities for FY 10 & FY 11.

Impact: This allows DSS to assist homes in managing cash flow (has no net fiscal impact to state) .

49

OLM

Extends the term of the Commission on Enhancing Agency Outcomes to 12/31/11.

Section 50 requires the Treasurer to transfer $987, 900, 000 in FY 10 and $393, 900, 000 in FY 11 from the Budget Reserve Fund (BRF) to the General Fund to be used as revenue. Currently, the BRF has a balance of $1, 381.8 million. Under existing law, resources of the Budget Reserve Fund (BRF) are deemed appropriated for purposes of funding a deficit, as determined by the Comptroller, with respect to the immediate preceding fiscal year. Therefore, the amendment would preclude the use of the BRF to offset the anticipated FY 09 deficit.

Section 51 adds services to the list of cooperative purchasing contracts that DAS can enter into for municipalities. To the extent that DAS is able to leverage purchasing power to achieve economies of scale, various municipalities may achieve a savings on certain services. DAS will not incur any costs to implement this provision.

Section 52 delays until FY 13 implementation of the juvenile jurisdiction age change, which would eliminate an approximate $95 million statewide cost in the 2010-11 biennium.

Section 53 delays, from July 1, 2009 to July, 1, 2012, the starting date and corresponding fiscal impact for the law requiring that educational suspensions take place in schools. The cost avoidance is maintained until July 1, 2012. Thereafter, the amendment reduces the possibility of out-of-school suspensions, which may result in school districts having to provide alternative in-school programs not currently utilized.  This may result in an increased need for staff.  The potential cost would likely be minimal although larger school districts with numerous suspensions could see costs which could be considered significant.  The potential cost is dependent on the chosen path of implementing in-school suspensions rather than out-of-school suspensions.

Section 54 of the amendment states that each public agency must post its meeting minutes on their Internet web site, if available, for each session held on or after July 1, 2012. This has no fiscal impact.

Section 55 requires a two-thirds vote by the House and the Senate for the General Assembly to enact a state mandates on municipalities. Requiring a two-thirds vote to pass a bill that creates or enlarges a state mandate may result in fewer such mandates being enacted, which would reduce potential future state mandate costs to municipalities.

Section 56 allows for a delay, through June 30, 2011, for municipal and local or regional board of education collective bargaining agreements and binding arbitration. The terms of the existing collective bargaining contract would remain in effect. This provision may result in a savings to certain municipalities and local or regional boards of education, depending on the terms of the existing contract.

Section 57 establishes an irrebuttable presumption that a municipality is required to limit any property tax increase to the change in the consumer price index or 1% (whichever is greater) and that a municipal budget reserve of 10% or less is not available to pay the cost of any item subject to arbitration. This may result in a savings to municipalities as it requires arbitrators to exclude such reserves from consideration when they assess what a municipality can afford.

Sections 58 - 62 make numerous changes to municipal and local or regional boards of education collective bargaining and binding arbitration, the effect of which may reduce municipal and local and regional board of education costs.

Sections 63 - 72 permit two or more local or regional school districts to jointly perform any function that each district must perform separately. This could result in a potential savings to local and regional school districts, as they may be able to take advantage of economies of scale. Additionally, Sections 71 and 72 make two or more municipal employers that are planning to undertake the joint performance of a municipal function a single municipal employer for collective bargaining law. The fiscal impact to municipalities is indeterminate as any costs or savings would depend on the outcome of collective bargaining negotiations.

Section 73 - Assuming that $1.316 billion is issued ($1.2 billion in principal and $116 million in issuance costs and capitalized interest for FY 10 and FY 11) at a 4.5% interest rate over a 7 year term, the total amount of debt service (principal and interest) is $1.499 billion. The debt service payments will be made from the resources of the General Fund. The table below shows the annual debt service payments between FY 12 and FY 16.

Economic Recovery Note Debt Service Payments1

($ millions)

Fiscal Year

Principal

Interest

Total

FY 10

0

0

0

FY 11

0

0

0

FY 12

241

59

300

FY 13

251

48

300

FY 14

263

37

300

FY 15

275

25

300

FY 16

287

13

300

Total

1, 316

183

1, 499

1The estimates assume that the same amount of debt service would be paid in each year that the bonds were outstanding.

It should be noted that the notes are not exempt from the statutory cap on General Obligation (GO) bonds. This could have an adverse impact by potentially limiting the amount of GO bonds that can be issued for other state purposes (like school construction grants-in-aid) .

Section 74 reflects the FY 10 and FY 11 revenue estimates for the: 1) General Fund, 2) Special Transportation Fund Revenue, 3) Mashantucket Pequot Fund, 4) Soldiers, Sailors, and Marines' Fund, 5) Regional Market Operations Fund, 6) Banking Fund, 7) Insurance Fund, 8) Consumer Counsel and Public Utility Control Fund, 9) Workers' Compensation Fund, and 10) Criminal Injuries Compensation Fund.

Sources: Governor Recommended Budget 2009 – 2011 Biennium; CORE-CT Financial Accounting System; Department of Revenue Services; Office of the State Treasurer.

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. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.