OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-465

AN ACT REQUIRING NEWBORN SCREENING FOR ADRENOLEUKODYSTROPHY.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 14 $

FY 15 $

Public Health, Dept.

GF - Cost

392,551

190,068

State Comptroller - Fringe Benefits1

GF - Cost

31,104

41,471

General Fund - TOTAL COST

423,655

231,539

Public Health, Dept.

GF - Potential Revenue Gain

423,655

231,539

POTENTIAL STATE FISCAL IMPACT

0

0

Municipal Impact: None

Explanation

The bill results in a state cost of $423,655 in FY 14 and $231,539 in FY 15 associated with testing Connecticut newborns for adrenoleukodystrophy and may also result in a potential General Fund revenue gain of the same amount in each fiscal year from increased newborn screening fees.

There are currently no states carrying out routine newborn screening for adrenoleukodystrophy and there is no uniform method for sample preparation and analysis.  As a separate analysis, sample preparation method and quality assurance process must be developed for adrenoleukodystrophy, two Chemists and associated costs are anticipated for the Department of Public Health (DPH), along with costs for testing supplies and equipment.  Fringe benefits costs for these two positions are included under the State Comptroller – Fringe Benefits. Revenue is indicated as “potential” as the bill does not require DPH to increase the newborn screening fee to cover costs associated with the screening. It is assumed that the agency would choose to do so. Details on these costs and potential General Fund revenue follows.

As the bill is effective 10/1/13, anticipated FY 14 costs to the Department of Public Health (DPH) include nine months of salary expenses for two Chemists of $90,051, nine months of testing supply expenses of $52,500 and a one-time instrumentation expense of $250,000.  FY 15 costs reflect annualized expenses for wages of $120,068 and testing supplies of $70,000.  Added to the DPH costs are fringe benefit costs under the State Comptroller – Fringe Benefits of $31,104 in FY 14 and $41,471 in FY 15, resulting in a total state cost of $423,655 in FY 14 and $231,539 in FY 15. Per CGS Sec. 19a-55, DPH has the authority to set the fee associated with newborn screening (currently $56 per infant).2 DPH could choose to recoup estimated state costs by increasing the newborn screening fee by $10.09 in FY 14 and $5.51 in FY 15.

A table of these costs and potential revenue is provided below.

Estimated Costs to Screen CT Newborns for Adrenoleukodystrophy & Potential Fee Increase

Item

FY 14 $1

FY 15 $

2 Chemists

90,051

120,068

Other Expenses (testing supplies)

52,500

70,000

Equipment (instrumentation)

250,000

-

Department of Public Health Costs

392,551

190,068

State Comptroller - Fringe Benefits Costs

31,104

41,471

STATE TOTAL

423,655

231,539

Possible newborn screening fee increase2

10.09

5.51

Potential General Fund revenue3

423,655

231,539

POTENIAL STATE FISCAL IMPACT

-

-

1SB 465 is effective 10/1/13. Position and testing supply costs reflect nine months of the fiscal year.

2Per CGS Sec. 19a-55, DPH has the authority to set the fee associated with newborn screening. This increase would raise the fee to $66.09 in FY 14 and $61.51 in FY 15 per newborn.

3Assumes 42,000 newborns born in Connecticut annually.

The Out Years

Should adrenoleukodystrophy be included in the Recommended Uniform Screening Panel by the U.S. Department of Health and Human Services (HHS) Secretary's Advisory Committee on Heritable Disorders in Newborns and Children,3 it is anticipated that two full-time Chemist positions within DPH would not be needed to perform this screening. Furthermore, it is unknown whether existing equipment could be utilized to perform a standardized test for adrenoleukodystrophy once it is developed. If so, costs may be significantly lower in the future and the potential increase to the newborn screening fee by DPH would likewise be less.

It should be noted that fringe benefit costs estimated at 34.54% of payroll in FY 14 and FY 15 would also include normal annual pension costs (currently estimated at 7.5% of payroll) in the out years. These costs will be recognized in the state's annual required pension contribution in future actuarial valuations.

Sources:

2/27/13 Public Health Committee Testimony

 

State of New Jersey's Office of Legislative Services 1/14/13 fiscal estimate on screening newborn infants for adrenoleukodystrophy

1 The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller. The estimated active employee fringe benefit cost associated with most personnel changes is 34.54% of payroll in FY 14 and FY 15.

2 Total revenue generated from the newborn screening fee was $2.5 million in FY 12. Of this, per Sec. 39 of PA 11-48, $1.1 million was authorized for use by DPH to pay for expenses incurred to perform the testing. The remainder ($1.4 million) was deposited into the General Fund as unrestricted revenue.

3 http://www.hrsa.gov/advisorycommittees/mchbadvisory/heritabledisorders/recommendedpanel/index.html