OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-6704

AN ACT CONCERNING EXPENDITURES AND REVENUE FOR THE BIENNIUM ENDING JUNE 30, 2015.

AMENDMENT

LCO No.: 8672

House Calendar No.: 678

Senate Calendar No.: 692


OFA Fiscal Note

State Impact: See Below

Municipal Impact: None

Explanation

The amendment increases appropriations to the Department of Social Services (DSS) by $192.2 million in FY 14 and $167.2 million in FY 15. Specifically, the amendment decreases the Medicaid appropriation by $15 million in FY 14 and FY 15, and increases the Disproportionate Share account by $207.3 million in FY 14 and $182.2 million in FY 15. The decrease in Medicaid will result in a revenue loss in federal funds for the program of $7.5 million in both FY 14 and FY 15. The increase in the Disproportionate Share account will result in a revenue gain of $103.7 million in FY 14 and $91.1 million in FY 15 to reflect a 50% federal reimbursement rate.

Section 501 eliminates wage increases for non-union employees which is anticipated to result in savings of $17.6 million in FY 14 and $38.0 million in FY 15.  The amendment also eliminates increases to managerial state employees' longevity. This is not anticipated to result in a fiscal impact since non-union employee longevity was eliminated in the December 2012 Deficit Mitigation. Wage increases and longevity for union employees are governed by a collective bargaining agreement and therefore any changes would require an agreement between the state and the State Employees' Bargaining Agent Coalition (SEBAC).

In addition, section 501, increases the employee contribution rate to the State Employee's Retirement System (SERS) by 2%. This provision does not result in a fiscal impact to the state in FY 14 and FY 15 as current pension benefits, including contribution rates, are governed by a collective bargaining agreement between the state and the SEBAC which is in effect until 2022. New employees hired after July 1, 2011 are governed by the current pension agreement.

Under current law, when an agreement is in conflict with statute, the provisions of the agreement supersede statute (CGS Sec. 5-278(e)). The provisions of the current agreement are in place until a subsequent agreement is negotiated.

The fiscal impact in 2022, assuming the provision to increase employee contributions to SERS are agreed to in an agreement between the state and SEBAC, will be quantified in the state's SERS actuarial valuation and reflected in the state's annual required contribution.

Section 502 increases the Statewide Hiring Reduction Lapse to $30 million in both FY 14 and FY 15.

Section 503 may result in a revenue gain to the state for services hospitals provide for which the state reimburses to the extent that the hospitals are able to receive additional federal revenue.

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.