OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sHB-5377

AN ACT IMPLEMENTING THE RECOMMENDATIONS OF THE LEGISLATIVE PROGRAM REVIEW AND INVESTIGATIONS COMMITTEE ON THE REEMPLOYMENT OF OLDER WORKERS AS THEY RELATE TO THE LABOR DEPARTMENT.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 15 $

FY 16 $

Labor Dept.

GF - Potential Cost

Up to 17.0 million

Up to 17.0 million

Treasurer, Debt Serv.

GF - Cost

None

1.0 million

Municipal Impact: None

Explanation

The bill contains a number of provisions regarding the Department of Labor (DOL) as it relates to unemployed older workers, and authorizes $20.0 million in General Obligation (GO) bonds for the Subsidized Training and Employment Program (STEP UP). This results in a potential cost of up to $17.0 million in FY 15 and up to $18.0 million in FY 16.

Section 1 requires the Connecticut Employment and Training Commission (CETC) within DOL to coordinate an electronic state hiring campaign to encourage the reemployment of older workers through the DOL website, and submit a report on the status of the campaign to the Labor Committee by January 1, 2015. This does not result in any fiscal impact as it is anticipated that CETC could provide the information required by the campaign and produce the report without additional staffing or outside expertise.

Section 2 requires DOL to develop a one-page quick-reference guide describing existing resources for unemployed older workers, and make that information available through the 2-1-1 Infoline program. There is no cost to develop the quick-reference guide; however there is an estimated cost of up to $20,000 annually to ensure that the information is accessible through the 2-1-1 Infoline program. This estimate is based on the cost to agencies to provide similar referral services through 2-1-1.

Section 3 requires DOL to promote the state's apprenticeship programs through job centers throughout the state. This does not result in any fiscal impact as information regarding the program is currently available, and could be provided to job centers at no cost to the agency.

Section 4 requires DOL to convene a working group to consider whether certain individuals providing resume writing assistance should require certification. This does not result in any fiscal impact.

Section 5 requires DOL to provide access to on-line learning courses for unemployed individuals throughout the state. Based on current data from DOL regarding the number of unemployed individuals in the state, this results in a cost of up to $17.0 million in FY 15. This assumes a cost of approximately $100-$130 per license, based on the cost of online learning programs currently offered on a limited basis through certain job centers throughout the state. The on-going cost is dependent on the number of unemployed individuals in the state in the future.

It should be noted that the bill requires DOL to provide this service within available resources. It does not appear that this mandates that the agency perform the activity regardless of available funding, therefore the cost described above is potential.

Sections 6 & 7 expand the STEP UP program and authorize a total of $20.0 million in General Obligation bonds ($10 million in each of FY 15 and FY 16) for the program. The fiscal impact is summarized in the table below. Assuming that the first $10 million is allocated through the State Bond Commission during FY 15 and the Office of the State Treasurer issues the bonds before the end of FY 15, the debt service cost in FY 16 will be $1.0 million.

New GO Bond Authorization and Estimated Debt Service Cost

$ millions

Fiscal Year

Authorization Amount

Total Debt Service Cost*

Interest

Principal

FY 15

10.00

15.25

5.25

10.00

FY 16

10.00

15.25

5.25

10.00

TOTAL

20.00

30.50

10.50

20.00

*Figures assume that bonds are issued at 5.0% over 20 year term

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation. The General Fund debt service impact identified above would continue over the 20 year term of issuance for the bonds.

Sources:

Department of Labor Labor Market Information

 

Program Review and Investigations Report on the Reemployment of Older Workers December 2013