OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 ↓ (860) 240-0200
AN ACT IMPLEMENTING PROVISIONS OF THE STATE BUDGET FOR THE FISCAL YEAR ENDING JUNE 30, 2015.
OFA Fiscal Note
The bill: (1) makes changes to General Fund appropriations in HB 55961, which result in a net increase of $526,814 in FY 15, (2) makes changes that result in $1.3 million General Fund revenue loss, (3) includes various changes to implement the FY 15 Revised Budget and (4) includes other provisions.
The bill reduces the General Fund balance from $2.2 million to $0.4 million in FY 15. The table below compares revenue estimates to expenditures.
FY 15 Revised Budget Fund Balance (in millions)
Surplus/ (Deficit) $
Summary of Appropriations Adjustments
The table below includes the appropriations changes contained in the bill (Sections 80 and 231-233) that result in a net increase in the General Fund of $526,814.
FY 15 Appropriations Changes from HB 5596
Department of Revenue Services
Office of Legislative Management
Department of Emergency Services and Public Protection
Department of Consumer Protection
Department of Correction (transfer within agency $330,000 from OE to Program Evaluation)
OPM - PILOT - State Owned
OPM - PILOT - Colleges and Hospitals
OPM - Property Tax Relief
DPH - School Based Health Clinics
TOTAL GF IMPACT
The bill makes appropriations adjustments which result in the FY 15 Revised Budget being under the spending cap by approximately $25.9 million. HB 5596 was under the spending cap by $23.9 million, therefore this bill reflects a change of $2 million.
Summary of Revenue Adjustments
The bill includes provisions that result in a reduction in General Fund Revenue of $1.3 million. The table below identifies the changes:
FY 15 Revenue Adjustments
Diversion of Revenue for Neglected Cemeteries
Exempt Webster Bank Arena from Admissions and Dues Tax
Exempt Sharon Hospital from Sales and Use Tax
TOTAL GF IMPACT
Below is a section by section analysis of the bill.
Sections 1 - 18 and 257 expand application of the False Claims Act from Medicaid to all health and human services programs. HB 5596 provides $200,000 in FY 15 to the Office of the Attorney General for potential litigation.
These sections allow a civil action to be brought before the Superior Court. There is no impact to the Judicial Department as the number of actions is not anticipated to be great enough to need additional resources. The court system disposes of over 400,000 cases annually.
Currently, the state can pursue fraud under the False Claims Act only for the Medicaid program. HB 5596 includes anticipated savings of $104 million under Medicaid from enhanced efforts to curtail fraud.
Sections 19 - 22 result in a cost to the Department of Public Health (DPH) of $161,200 in FY 15 and $194,073 in FY 16 and a cost to State Comptroller – Fringe Benefits of $57,263 in FY 15 and $69,314 in FY 16. These sections require DPH to review a municipality's emergency medical services (EMS) plan and the primary service area responder's (PSAR's) provision of services under the plan not less than once every five years and assign a rating to these plans. They also require DPH to determine whether to approve of the sale/transfer of more than 50% of the interest/assets of a PSAR and allow the agency to hold hearings on such applications. Further, they require DPH to conduct hearings on “alternative emergency medical services plans” (established under the bill) and approve/disapprove of such plans. It allows DPH to develop and implement procedures to designate a temporary responder, which may include a hearing. Funding of $144,178 and associated fringe benefit costs are included for this purpose in HB 5596.
The salary and other expenses for two full-time Health Program Assistants (HPAs) with a 10/1/14 start date and a half-time Special Investigator and half-time Staff Attorney with a 7/1/14 start date are $161,200 in FY 15 and $194,073 in FY 16. The associated cost to State Comptroller – Fringe Benefits for these positions is $57,263 in FY 15 and $69,314 in FY 16. HPAs are included in order to provide approximately 17 municipalities each (34 annually for a five-year total of just over 169) with technical assistance and disagreement resolution for these plans, which are extensive and complex. The half-time Special Investigator and half-time Staff Attorney are included to investigate and act on the sale/transfer of more than 50% of the interest/assets of a PSAR, alternative emergency medical services plans and conduct hearings.
Sections 23 - 26 allow registrars of voters to use electronic devices that are approved by the Secretary of the State (SOTS) to check in voters and requires SOTS to create and maintain a list of such devices that municipalities may use for electronic checking in of voters. The SOTS is anticipated to incur a cost of $150,000 to review, approve, and create a list of approved electronic devices for use in the voter check in process. Funding of $150,000 is included in HB 5596 for this purpose.
Sections 27 - 43 allow for Connecticut Higher Education Trust (CHET) contributions to be made through income tax refunds and result in a one-time cost to the Department of Revenue Services (DRS) of $75,000 - $80,000 in FY 15 for updates to the online Taxpayer Service Center. Section 15 of HB 5596 allows for the carry forward of $80,000 in the Department of Revenue Services Personal Services account from FY 14 into FY 15, which will be transferred to the Other Expenses account for modifications to the tax systems and forms related to this CHET contribution provision.
Sections 27 - 43 and 259 do not result in a General Fund cost to the Office of the State Treasurer (OST) because the language stipulates that OST may pay the costs of establishing and administering the program from the CHET Baby Scholars Trust Account. Section 19(a) of HB 5596 transfers $4.4 million from the assets of the defunct Connecticut Student Loan Foundation (CSLF) to capitalize the CHET Baby Scholars Program.
Section 44 eliminates the requirement that $135 million of Indian gaming revenue be transferred from the General Fund to the Mashantucket Pequot/Mohegan Fund for aid to municipalities. Instead, the amount transferred to the General Fund from the Pequot Fund must be equal to the appropriation for the Pequot grant. This has no fiscal impact. The bill does not change the FY 15 appropriation for Pequot grants, or the amount needed to fully fund the grant (Pequot grants are prorated in years that the appropriation is insufficient to pay fully funded grant amounts).
Section 45 requires Pequot grant funding retained from municipalities due to noncompliance with Land Use Recording Fee collection requirements to be transferred from the Pequot fund to the General Fund. This results in an annual revenue gain to the General Fund of $109,000 beginning in FY 15. There is an additional revenue gain in FY 15 of $109,000 due to the transfer of funding retained in previous fiscal years, for a total of $218,000 in FY 15 only. This is included in HB 5596.
Section 46 requires each basic and review training program for police officers conducted by the Department of Emergency Services and Public Protection (DESPP) or a municipal police department to include a course on handling incidents involving an individual affected by a serious mental illness. DESPP is anticipated to incur costs of approximately $50,000 in FY 15 to develop a training module for state and municipal police officers consistent with this requirement. Both DESPP and various municipalities are anticipated to incur minimal costs in FY 16 and annually thereafter to incorporate such a training program into existing basic and review training curricula. Funding of $50,000 is included in HB 5596 for this purpose.
Section 47 eliminates the transfer of funds from the Dry Cleaning Remediation account to Dry Cleaning Remediation administration account, a non-appropriated account. There will be an estimated cost of $150,000 to the General Fund to support the administration of the program when the balance of the administration account is fully expended, which is anticipated to occur by FY 17.
Sections 48 - 54 and 258 transfer the administration and funding of $28.5 million of the Renters' Rebate Program from the Department of Housing (DOH) to the Office of Policy Management (OPM). HB 5596 implements this provision. Section 49 re-opens eligibility for the Renters' Rebate Program. This results in an annualized cost of $6.5 million in FY 15. HB 5596 includes the $6.5 million necessary to re-open the program.
Section 55 requires the Office of the State Treasurer to transfer military medals received as unclaimed property to the Department of Veterans' Affairs. This has no fiscal impact.
Section 56 makes membership changes to the School Buildings Projects Advisory Council, which has no fiscal impact.
Sections 57 - 65 and 259 limit benefits from the Soldiers, Sailors and Marines' Fund to at least $2 million annually (annual benefits in FY 12, FY 13 and FY 14 are approximately $2 million). This section permits these benefits to be paid from interest income and dividends generated by the Fund or from the principal of the Fund itself if interest income and dividends are insufficient in any given year. The current principal of the Fund is approximately $68.2 million. The bill also prohibits the American Legion, which will begin administering the Fund in FY 15, from charging administrative costs to the Fund or the interest income.
Section 66 transfers the revenue from an existing health and welfare fee assessment of domestic insurers, health care centers, third-party administrators and exempt insurers doing health insurance business in the state from the General Fund to the Insurance Fund and implements HB 5966. It requires that this assessment, executed by the Insurance Commissioner, be adjusted upwards or downwards by the actual expenditures from the prior fiscal year. Currently, the total amount assessed for the resources of the General Fund is built off of the appropriation for DPH's Immunization Services account. HB 5596 transfers DPH's Immunization Services from the General Fund ($31,361,117) to the Insurance Fund. Fringe benefit costs for employees funded by the Insurance Fund are budgeted within the Insurance Fund. Therefore, fringe benefits costs for three DPH employees ($148,324) are also transferred from the Office of the State Comptroller – Fringe Benefits, in the General Fund, to DPH's Immunization Services account in the Insurance Fund. This results in total funding of $31,509,441 for DPH's Immunization Services account in HB 5596.
Section 67 requires the deposit of approximately $4.5 million of settlement funds between the Office of Attorney General and an electric supplier into a non-appropriated account within the Department of Energy and Environmental Protection. The funds will be used for consumer assistance, consumer education and enforcement activities related to electricity suppliers and providers.
Section 68 results in no fiscal impact as the Board of Regents has the expertise to report on its spending plans.
Sections 69 and 70 do not result in a fiscal impact as they are technical in nature. These sections replace the DSS with the Department of Aging as the recipient of funds from the Department of Insurance Health Insurance Assessment to support the Fall Prevention program.
Section 71 could result in a cost associated with allowing funding, that would otherwise lapse, to be utilized to provide housing subsidies in the subsequent fiscal year. While the Department of Mental Health and Addiction Services (DMHAS) has historically made this funding available to private providers, the Auditors of Public Accounts raised concerns about such a fiscal process. The provisions of the bill explicitly allow this practice.
Section 72 requires the Commissioner of Housing to prioritize veterans in the security deposit program. HB 5596 provides $50,000 to support veterans in the program.
Section 73 results in a cost of $600,000 to DSS to expand from 50 slots to 100 slots the Connecticut Home Care Program for Adults with Disabilities. HB 5596 provides $600,000 for the expansion of the program.
Section 74 may result in a minimal cost to DSS to provide coverage of certain over-the-counter medications for all Medicaid clients including those where coverage is required pursuant to the federal Affordable Care Act.
Section 75 which requires certain manufacturers to report to the Department of Consumer Protection (DCP), instead of DPH, payments/transfers of value to advanced practice registered nurses, does not result in a fiscal impact to DCP. Likewise the requirement that DCF, instead of DPH, publish such information on its website does not result in a fiscal impact to the agency.
Section 76 eliminates DSS estate recovery for recipients of HUSKY D. As this program is 100% federally funded, there is no fiscal impact.
Section 77 is not anticipated to result in a fiscal impact to the Office of the State Comptroller (OSC) to (1) not later than December 1, 2014 analyze the impact of facility fees on not less than five service categories in the state employee and retiree health plan, (2) not later than March 1, 2015 analyze the appropriateness and reasonableness of such fees (3) the feasibility of removing reimbursements for such fees by July 1, 2015, and (4) not later than October 1, 2015 to submit a report to the General Assembly on their findings and analysis.
Section 78 does not result in a fiscal impact to DSS. This section requires the DSS to submit a report to the General Assembly, on or before January 1, 2015, on the cost of providing services under the Connecticut Home Care Program for the Elderly and the pilot program for persons with disabilities.
Section 79 establishes a Juvenile Justice Policy and Oversight Committee. Funding of $150,000 is included in HB 5596 for this purpose.
Sections 80 - 82 transfer appropriations totaling $330,000 from Other Expenses to the new Program Evaluation account in the Department of Correction. These sections require the agency to evaluate vocational education programs provided to prisoners and report such findings to the Judiciary Committee and the Results First Oversight Committee. HB 5596 provides funds in Other Expenses.
Sections 83 and 84 require the Institute for Municipal and Regional Policy at Central Connecticut State University to assess certain programs as specified in bill. HB 5596 includes $50,000 for this purpose.
Section 85 establishes a family violence mediation pilot program in two juvenile courts. Funding of $75,000 is included in HB 5596 for this purpose.
Section 86 allows certain municipal water treatment systems to be treated as regional water treatment systems for purposes of receiving grants and loans through the Clean Water Fund (CWF) administered by the Department of Energy and Environmental Protection (DEEP).
This reclassification may result in additional revenue to municipalities, but does not authorize additional General Obligation (GO) bonds or loans through the CWF. This reclassification may also, however, increase the pool of potential grants and loans that must be paid out under the CWF, potentially resulting in increased state debt service costs, to the extent that additional GO bond funds are authorized in the future to provide for the expanded scope of the CWF. Sections 65-66, PA 13-239, the FY 15 bond bill, provides $218 million for GO bonds and approximately $332 million in low interest loans (revenue bonds) for the CWF.
Sections 87 and 88 specify that the Insurance Commissioner must see that all laws concerning the authority of the Connecticut Health Insurance Exchange are faithfully executed. As this reiterates the existing authority of the Insurance Commissioner, there is no fiscal impact. These sections also specify that any health carrier aggrieved by an administrative action by the Insurance Commissioner may appeal to the Superior Court. There is no impact to the Judicial Department from allowing any aggrieved party to appeal. The number of appeals is not anticipated to be great enough to need additional resources. The court system disposes of over 400,000 cases annually.
Section 89 makes a number of changes, including: (1) Providing a revised definition of racial diversity under the interdistrict magnet school law as it applies to Sheff magnet schools. This makes it easier to reach the racial goals of Sheff because some students who used to count as minority will now count as nonminority. Correspondingly, this could result in an increased cost to the state, and schools that otherwise would not have been eligible for a higher grant, now could be eligible. The annual per pupil grants vary by type of school, and compliance status; (2) Restricts the number of students from a participating district that may enroll in the magnet school in order to meet the bill's reduced isolation standard, which, as described above, makes it easier to meet the Sheff goals, thus resulting in increased costs to the state; (3) Phases out the special magnet school grant, for Edison, which results in an anticipated savings of $269,025, in FY 15; (4) Clarifies magnet school payment amounts and dates for Goodwin Magnet School; and (5) Restrains magnet school enrollment for FY 15 based on a number of varying factors. This is anticipated to result in reduced enrollment savings of approximately $7 million in FY 15, with corresponding transportation savings of $1 million. The provisions in this section implement HB 5596.
Section 90 requires SDE to, within available appropriations, award a grant up to $250,000 to the Hartford school district for program development and expansion of the Dr. Joseph S. Renzulli Gifted and Talented Academy. HB 5596 includes funding for this purpose.
Section 91 creates a program for the Hartford School District to receive an annual grant to convert an existing neighborhood school into a Sheff Lighthouse School. SDE will award, within available appropriations, an annual grant of $750,000 to Hartford for FY 15 through FY 18 to assist in the development of curricula and staff training for the Sheff Lighthouse. HB 5596 includes funding for this purpose.
Section 92 makes a procedural change to the payment schedule for supplemental transportation and does not result in a fiscal impact.
Sections 93 - 100 make technical changes related to the new Sheff stipulation and is not anticipated to result in a fiscal impact.
Sections 101 - 103 result in a cost to the state of $70.9 million by making changes that authorize SDE to pay for 100% of the reimbursable construction costs for three new Sheff magnet schools. The cost is attributable to changing the current rate of reimbursement for the projects from 80% to 95% and then authorizing the state to pay the local share of the projects. The cost of principal payments totals $46.5 million with interest totaling $24.4 million over future years.
Section 104 results in a cost to the state of $2.6 million. The cost is attributable to having the state pay for the local share of additional CREC construction projects. The cost of principal payments totals $1.7 million with interest totaling $915,000 over future years.
Section 105 is procedural and results in no fiscal impact.
Sections 106 and 107 eliminate the local share of eligible project costs for three CREC schools, which reduces the state's accounts receivable by $24.5 million total. This reduction increases by $24.5 million the state's accumulated GAAP deficit, which is estimated to be $618.6 million currently.
Section 108 extends a cap on the state transportation formula grant, through FY 15. If the cap were not extended, the state would be responsible for issuing approximately $59 million in additional grants to municipalities. Extending the cap results in a savings to the state and a corresponding revenue loss to municipalities. HB 5596 includes funding of $24.9 million in the Transportation of School Children grant, which implements this change.
Section 109 ensures that money appropriated for the Priority School District grant, in FY 14 and FY 15 is spent in the appropriate year. Additionally, this section includes a one-time carry forward provision, which allows priority school districts to carry forward funds from the priority school district grant. This results in a potential revenue gain to certain priority school districts that otherwise would have lapsed the funds.
Sections 110 and 111 make technical changes that are not anticipated to result in a fiscal impact.
Section 112 changes the formula for how much funding a local or regional board of education must provide to a local charter school that it sponsors, which results in a change in the internal distribution of funds within a district, and does not result in a fiscal impact.
Sections 113 and 114 include non-supplant language regarding alliance district funds. Additionally, Section 114 allows alliance districts to use their alliance funding to pay for magnet school tuition. This increases the flexibility provided to local and regional school districts.
Section 115 removes the requirement that the mastery examination be given in either March or April, and instead allows the exam to be administered at any time throughout the school year. This does not result in a fiscal impact.
Section 116 extends the date by which certain magnet schools must meet compliance for requirements of racial minorities, by two additional years. This results in a potential revenue gain to certain magnet schools, who otherwise would not have received their magnet school grant, and a corresponding cost to the State Department of Education for paying those grants. This implements HB 5596.
Section 117 extends the early literacy pilot program by two years. HB 5596 includes an additional $500,000 for k-3 reading assessment for total program funding of $3.2 million.
Sections 118 and 119 makes changes to the vocational agriculture system, which results in a revenue gain of $750,000 to vocational agriculture centers, and a savings to participating towns that currently pay tuition, of $750,000. This implements the $1.5 million included in HB 5596.
Sections 120 - 129 allow judges to order specified financial support in civil restraining orders. Funding of $157,611 (and additional fringe benefit funding) is included in HB 5596 for half-year funding for five positions and other expenses to assist with this new task.
Section 130 deleted.
Section 131 results in a cost to municipalities for the purchase of a secured lockbox for the collection of pharmaceuticals. Some municipalities already have such lockboxes. HB 5596 contains $50,000 in DESPP for the purchase of additional lockboxes. Section 231(b) transfers the funding to the Department of Consumer Protection for such purpose.
Sections 132 and 133 require the Department of Children and Families to adopt policies and procedures to maximize the enrollment of children in eligible preschool programs and submit a report to various committees no later than 1/1/15, and do not result in a fiscal impact.
Section 134 codifies current practice related to countable Temporary Family Assistance (TFA) employment activities, which has no fiscal impact.
Section 135 does not result in a fiscal impact. The bill requires DSS to submit a report to the General Assembly by January 1, 2015 on various topics relating to wheelchairs and complex rehabilitation technology.
Section 136 could result in a cost associated with increasing the Medicaid rate for private psychiatric residential treatment facilities, within available appropriations. The cost is dependent on the rate that is set and the number of people eligible for services. As the bill does not mandate that the agency increase rates regardless of available funding, the cost is potential.
Section 137 requires the chairs and ranking members of the Finance, Revenue and Bonding Committee to convene a panel of experts to conduct a thorough review of state and local tax structures. Given the scope and probable complexity of the study, it is anticipated that outside or contracted expertise would be required. Section 1 of HB 5596 includes $500,000 for the costs associated with conducting the study. Section 231(a) transfers the funding from the Department of Revenue Services to the Office of Legislative Management for such purpose.
Section 138 transfers $10 million annually, from FY 16 - FY 25, from the Tobacco Settlement Fund to the smart start competitive grant account. Funding will support the establishment or expansion of public preschool programs, as described in SB 25.
Section 139 specifies that 70% of tax credits reserved under the Historic Homes Rehabilitation Tax Credit program be for eligible projects located in a regional center. This does not result in any fiscal impact as it does not change the aggregate cap on the amount of credits available under the program.
Sections 140 - 157 establish benefit corporations as a type of for-profit corporation. There is a cost to the Secretary of the State (SOTS), estimated to be approximately $60,000, associated with programming a new business entity into the CONCORD commercial records database. These sections are expected to have a neutral impact on fee revenue at the SOTS. The SOTS collects fees from business entities for establishment, filing of annual reports, and dissolution. SOTS is not anticipated to realize a change in revenue from such fees as it is anticipated that most new benefit corporations will be reclassifications of existing businesses. HB 5596 includes carry forward funding of $60,000 for this purpose.
Section 158 results in a cost to DPH of less than $20,000 in FY 15 and less than $1,500 annually thereafter as it requires the establishment of advanced practice registered nurse (APRN) profiles. Physicians are currently the only health care providers that have profiles available online through the State of Connecticut eLicensing website. HB 5596 includes funding for this purpose.
The approximate cost to DPH in the first fiscal year of less than $20,000 reflects one-time eLicense consultant costs for configuration and testing of new “grids” needed to accommodate APRN profiles within the eLicensing website. Also reflected in the first fiscal year is a cost for mailings to alert APRNs to this new, required feature and provide them with direction on inputting information into the website. Costs in the second year and onward reflect eLicensing grid development and maintenance of less than $1,500 per year. With the exception of disciplinary data, all the information in existing physician profiles is self-reported by the physicians. DPH does not validate the accuracy or correctness of the data provided. It is anticipated that APRNs would be required to log into the eLicense system to enter their profile data and provide updates as needed. It is also anticipated that DPH will not accept paper profiles from APRNs, which would require data entry by DPH staff and have an associated cost.
Section 159 approves the provisions of the collective bargaining agreements between 1) the Office Early Childhood (OEC) and the Connecticut State Employees Association (CSEA-SEIU Local 2001) and 2) the Personal Care Attendant Workforce Council and the New England Health Care Employees Union (District 1199, SEIU). Funding of $8,494,625 and $3,148,000 is included in HB 5596 to support such agreements, respectively.
Section 160 extends by one year the ability of the state to enter into public-private partnerships with private contractors. This could result in the development of a state project(s) that would not otherwise have occurred. As of May 5, 2014, no such partnerships have been approved per CGS 4-256. To the extent that such projects are developed during the extension timeframe such project would preclude a future increase in a municipality's taxable grand list for property developed under a public-private partnership agreement.2
There may be a fiscal impact to the state depending upon the agreement terms of the project(s). The state may incur a cost if the state agrees to pay a portion of the capital expenses. There may also be a revenue gain if the state under such agreement retains some or all of the potential revenue generated.
Section 161 clarifies that the Department of Rehabilitation Services may accept private monetary bequests or gifts and codifies current practice, which has no fiscal impact.
Section 162 may result in a revenue gain to the University of Connecticut Health Center (UCHC) of up to $117,200. The bill would allow the fire department at the UCHC (which currently includes certified paramedics) to treat and transport patients within the UCHC campus. Currently, although the UCHC fire department is the likely first responder to medical incidents on campus, it must contact a private ambulance service to actually transport a patient.
Should the UCHC transport the patient, and be able to bill private insurance or other payers for this service, additional revenue may result. The amount of any revenue would be dependent upon the number of transports, and the amount the UCHC would be able to bill for these transports, which cannot be known in advance. In 2013, the UCHC fire department responded to 206 medical incidents on campus that required transport. Based on this experience, assuming 200 responses annually, at a per trip billable rate of $586, UCHC could realize additional annual revenue of $117,200.
Section 163 and 164 are procedural and result in no fiscal impact.
Sections 165 - 168 consolidate the Historic Structure Rehabilitation Tax Credit programs available under current law. As these sections do not expand eligibility under the programs, this does result in any revenue impact to the state over time. However, to the extent these sections alter the timing of the reservation of tax credits under the programs, this could increase or decrease the amount of tax credit reservations made in any particular year. The change in timing is not expected to impact fiscal years prior to FY 16, however, because it takes approximately two years for a reservation to result in a revenue loss.
Sections 169 - 172 and 259 eliminate references to the Health Information and Technology Exchange of Connecticut (HITE-CT), a quasi-public agency, which does not result in a fiscal impact as federal support for HITE-CT ended in FY 14 and state funding is not appropriated for this agency in FY 15.
Sections 173 - 175 require DSS to develop uniform electronic information technology standards, implement the current health information technology plan, and report certain information to the General Assembly. As these sections clarify the department's current responsibilities concerning information technology, there is no anticipated additional cost.
Section 176 establishes the Go Back to Get Ahead program within the Board of Regents for Higher Education. Funding of $6 million is included in HB 5596 for this purpose.
Section 177 extends the ability to designate an enterprise zone to (1) Thomaston and (2) Wallingford for a term of five years which could result in an annual revenue loss from the corporation tax of $200,000 - $400,000 annually beginning as early as FY 15. The revenue loss could be off-set by additional tax revenue from the creation of new or the expansion of existing businesses to the extent that these financial incentives result in economic development that otherwise would not have occurred.
There is a potential grand list reduction to Thomaston and Wallingford beginning as early as FY 16 due to multiple five-year property tax breaks for which certain businesses located in enterprise zones are eligible. Providing grants to these towns may result in a reduction in Distressed Municipalities grant payments to all other towns.
Section 178 waives the requirement that the City of Norwich be responsible for paying not less than one-third of the cost of making improvements to the Rose City Senior Center in order to receive a $690,000 grant-in-aid for the project that was approved by the State Bond Commission on January 9, 2014.
Section 179 and 260 decrease the portion of certain court fees deposited into the Judicial Data Processing Revolving Fund from 30% to 5% and results in a revenue loss of approximately $1.7 million and a revenue gain to legal aid of approximately $1.7 million.
These sections also result in a revenue gain to the Judicial Data Processing Revolving Fund of approximately $300,000 beginning in FY 16 by continuing the increase in certain court fees that were scheduled to sunset on July 1, 2015. The removal of the sunset of these fees also results in a revenue gain of approximately $6.3 million to legal aid.
Sections 180 - 185 will result in a cost of at least $400,000 in FY 15 to the Office of the State Comptroller (OSC) for at least two staff members to support the Connecticut Retirement Security Board (CRSB) established by these sections and to hire a consultant to conduct a market feasibility study. HB 5596 carries forward $400,000 from FY 14 into FY 15 in Medicaid and transfers $186,000 to the OSC Other Expenses account to secure a consultant to conduct the market feasibility study, $170,000 to the OSC Personal Services account and $44,000 to the Office of the State Comptroller Fringe Benefits ($13,000 for Employers' Social Security Tax account and $31,000 for State Employees' Health Services account) for costs associated with additional personnel to support the duties of the CRSB. The study may result in a total cost of up to $1 to $2 million.
The CRSB is required, as of January 1, 2016, to submit a report to the General Assembly (GA) on the results of the study and as of April 1, 2016 submit a proposal to the GA regarding implementation of the Public Retirement Plan. There is no cost to the OSC to set up an account for funds received by the CRSB. Lastly, these sections have no fiscal impact to the Office of the State Treasurer related to holding the resources of the Connecticut Retirement Security Trust Fund in a separate account that is invested because the language specifies that the operational, administrative and investment costs of the fund would be paid by its assets.
Sections 186 - 191 expand who can apply for a civil protective order. Funding of $703,908 (and additional fringe benefit funding) is included in HB 5596 for half-year funding for 12 positions and other expenses to assist with this new task. This section also requires the chief court administrator of the Judicial Department to allow one or more family violence victim advocates to provide services in the Superior Court's family division in each judicial district. Funding of $48,500 is included in HB 5596 for two half-year funded contracted victim advocates.
Section 192 does not result in a fiscal impact to DSS. This section requires any Federally Qualified Health Center (FQHC) which does not use the state fiscal year as its fiscal year to submit their cost reports to the DSS six months after the completion of the FQHC's fiscal year.
Section 193 does not result in a fiscal impact to DSS. This section requires DSS to accept electronic prescriptions for Medicaid reimbursement for durable medical equipment.
Section 194 may result in a fiscal impact to DSS to the extent that a pay for performance program is implemented for pediatric psychiatric inpatient care, which is indeterminate. The bill requires a pay for performance program to be within available appropriations.
Section 195 may result in a fiscal impact to DSS to the extent that the Commissioner of DSS changes various inflation and rate of return factors utilized in the Medicaid rate setting formula for residential care homes, which is indeterminate. The bill requires this section to be within available appropriations.
Section 196 results in an annualized revenue loss of $500,000 beginning in FY 17 by exempting sales of goods and services to Connecticut credit unions from the sales and use tax. This estimate assumes that the current 29 credit unions maintain their state charter.
Section 196 also results a potential revenue gain of up to $163,000 beginning in FY 17. Based on research from the Department of Banking, there are potentially 15 federal credit unions that may transfer to a state charter as a result of this bill.
Section 197 requires the Connecticut Employment and Training Commission (CETC) to develop a statewide plan and funding proposal regarding certain education programs in emerging industries, and report to the Higher Education and Employment Advancement Committee. CETC has the expertise and resources available to develop the plan without requiring additional staffing or outside expertise.
Section 198 requires the Commission on Children to develop a two-generational school readiness plan and report said plan to various committees of the General Assembly by December 1, 2014. This will not result in a fiscal impact.
Section 199 results in no fiscal impact as the effected agencies have sufficient expertise to develop a financial literacy education plan.
Section 200 increases from $200,000 to $250,000 the amount that DPH may contract for consultants to provide services to water utility coordinating committees.
Section 201 - 203 creates a new violation of sweepstakes or promotional drawing and results in a potential minimal revenue gain of less than $10,000 from fines. This new violation is punishable the same as professional gambling, a Class A misdemeanor. In FY 13 there was one offense with a fine of $100. The Department of Consumer Protection currently acts upon violations concerning internet sweepstakes cafes and therefore there is no fiscal impact to the agency.
Sections 204 - 206 result in a General Fund revenue loss of approximately $31,800 in FY 15 and $42,300 in FY 16 and a revenue gain of the same amounts to the Neglected Cemetery account. It allows municipalities to apply to the Office of Policy and Management (OPM) for funding under this account for maintenance of neglected burial grounds and cemeteries. Currently, the fees for death certificates collected by DPH are deposited in the General Fund as unrestricted revenue. In FY 13, DPH generated approximately $42,300 from death certificate fees. This revenue will be deposited into a separate, nonlapsing account known as the “Neglected Cemetery account” under the bill. As the bill is effective 10/1/14, nine months of revenue is reflected in FY 15 and twelve months of revenue is reflected in FY 16. There is no anticipated cost to OPM to administer this account. This fiscal impact would continue into the future subject to the number of death certificates requested of DPH.
Section 207 makes a technical change and has no fiscal impact.
Section 208 transfers $1.1 million from the systems benefits charge, a non-appropriated account, to Operation Fuel, Inc. and allows up to $100,000 of the total to be used for administrative costs. The state and municipalities, as ratepayers, would incur increased costs to the extent the systems benefits charge is insufficient to cover these expenses. Section 256 eliminates the transfer of $500,000 from being transferred from the systems benefits charge to the Operation Fuel account in the Department of Energy and Environmental Protection.
Section 209 is procedural in nature and results in no fiscal impact.
Section 210 clarifies that the $635,000 appropriation within the Department of Veterans Affairs for the administration of the Soldiers', Sailors' and Marines Fund is not reduced in FY 15. This does not result in a fiscal impact.
Section 211 specifies the distribution of funding for $1 million of the FY 15 appropriation for the Summer Youth Employment program within the Department of Labor contained in HB 5596.
Section 212 has no fiscal impact by requiring the Department of Economic and Community Development (DECD) to develop, in consultation with various related organizations including Connecticut Innovations, Inc. and Connecticut United for Research Excellence, Inc. (CURE), a program to promote and support the development of bioscience businesses in Southeastern Connecticut. Currently DECD is collaborating with such organizations such as CURE to promote bioscience innovation in the southeastern sector of the state.
Section 213 deleted.
Sections 214 - 216 make conforming changes to the transfer of $4 million from the Tobacco and Health Trust Fund to the General Fund in FY 15 contained in HB 5596.
Section 217 makes the transfer of $500,000 in each year (FY 14 and FY 15) from the Biomedical Research Trust Fund to the General Fund in FY 15 effective from passage and conforms to HB 5596.
Section 218 makes the transfer of $500,000 from the Private Occupational School Student Protection account in FY 15 effective from passage and conforms to HB 5596.
Section 219 lowers, for four fiscal years, the actuarially recommended pension contribution various municipalities in New Haven County must make when issuing pension deficit bonds. This results in a savings to various municipalities that issue pension obligation bonds in each of the four fiscal years.
Section 220 may result in federal matching funds of $5.5 million, thereby reducing Medicaid expenditures by a commensurate amount. This section requires the state to submit a Medicaid state plan amendment to receive federal reimbursement for certain services which are 100% state funded. These savings are included in HB 5596.
Section 221 results in no direct fiscal impact as costs are dependent upon subsequent negotiations.
Section 222 exempts for one year the Town of Milford from CGS 8-30g which outlines the procedure whereby a developer may appeal a local zoning and planning commission decision denying affordable housing developments. To the extent that there is a reduction in the number of decisions that the town has appealed within the moratorium period, the town could realize savings through reduced administrative and legal costs.
Section 223 results in an estimated revenue loss of $600,000 in FY 15 - FY 17 by exempting sales of tangible personal property and services to and by sole community hospitals from the sales and use tax. Currently, Sharon Hospital is the only hospital which is categorized as a “sole community hospital”. The exemption sunsets in FY 17.
Section 224 adds a group for which Care4Kids services would be given priority. This could result in a cost associated with extending eligibility for any household with a child participating in the Early Head Start- Child Care Partnership federal grant program, for up to 12 months, based on Early Head Start eligibility criteria. Currently, eligibility for Care4Kids is re-determined every eight months. To the extent that a family would otherwise have been found ineligible after eight months, the state would experience a cost for up to four additional months during which services were provided.
Section 225 exempts the Webster Bank Arena in Bridgeport from the Admissions Tax. This results in a revenue loss of $625,000 annually beginning in FY 15.
Section 226 requires that environmental impact evaluations completed for proposed improvements for the Rentschler Field Development include any industrial reinvestment project. This is not anticipated to result in a fiscal impact to the state or municipalities.
Section 227 makes changes to how union dues or fees may be charged to personal care attendants, which has no fiscal impact to the state.
Sections 228 and 256 make technical changes regarding the merger of regional councils of government, and provides for a transition period for such mergers. This has no fiscal impact.
Section 229 provides a grant of $1.3 million from the Regional Performance Incentive Account, a non-appropriated General Fund account, to the Capitol Region Council of Governments. The grant will be used to work with selected municipalities to conduct demonstration projects regarding the statewide high speed IT network.
Section 230 distributes $3.6 million to various organizations around the state that provide youth and social services. HB 5596 provides an additional $100,000 in grants, for a total of $3.6 million.
Section 231(a) transfers $500,000 in FY 15 from the Department of Revenue Services to the Office of Legislative Management for a tax study.
Section 231(b) transfers $50,000 in FY 15 from the Department of Emergency Services and Public Protection to the Department of Consumer Protection to support the drug collection lock boxes.
Section 232 reduces the appropriation included in HB 5596 for the Property Tax Relief account by $3,673,186 for FY15.
Section 233 increases the General Fund appropriation by $4.2 million in FY 15. This includes an additional $2 million to each of the PILOT accounts; and $200,000 to the DPH School Based Health Clinics account.
Section 234 distributes the Property Tax Relief appropriation of $1,126,814 within the Office of Policy and Management to municipalities. Of this appropriation, payments of $778,276 are intended to hold harmless any municipalities whose combined total State Property PILOT, College & Hospital PILOT, and Pequot grant payments in FY 15 are lower than in FY 14. Additional payments are also distributed to Montville ($345,327) and Norwich ($3,211).
Sections 235 and 236 conform statute to existing Department of Children and Families support of adopted children over the age of 18 until the age of 21. This is in alignment with the Federal Fostering Connections to Success and Increasing Adoptions Act of 2008. This Act expanded DCF's ability to claim Title IV-E reimbursement for children over the age of 18 that receive certain supports up to the age of 21 and is associated with $26.3 million in additional Title IV-E revenue in FY 15, included in HB 5596, and $15 million in FY 16 and future years.
Sections 237 - 247 deleted.
Section 248 establishes an aquatic invasive species management grant, prevention, and education program administered by the Department of Energy and Environmental Protection. Funding of $200,000 is included in HB 5596 for this purpose.
Section 249 is a conforming change to fix section 207. It has no fiscal impact.
Section 250 provides fifty-percent of ECS funding to be given to the town of Winchester in October, rather than twenty-five percent. This does not result in a fiscal impact to the state, but does result in a potential savings to the town of Winchester, associated with having to secure additional financing to meet their financial obligations.
Section 251 allows pass-through business entities to sell, assign, or transfer Apprenticeship Training tax credits earned under the manufacturing trades beginning on July 1, 2015. This results in an annual revenue loss of up to $620,000 beginning in FY 16.
Section 252 is anticipated to result in a savings to the Judges' and Compensation Commissioners' Retirement System (JRS) and be reflected in the FY 16 JRS annual required contribution (ARC) as reflected in the next JRS actuarial valuation.3 The potential savings is the result of reducing pension benefits for judges, family support magistrates, and compensation commissioners who begin serving in one of these positions on or after July 1, 2014 and retire with less than 10 years of service credit, which is indeterminate. The current retirement benefit is equal to two-thirds of the individual's final salary.4 The amendment reduces the two-thirds benefit by a factor equal to the number of years served (capped at ten) divided by ten.
By way of example, the current average annual salary of a judge is approximately $150,664.5 Under the current formula a judge earning the average salary with three years of service will receive an annual benefit of approximately $100,443. Under the bill the same judge will receive an annual benefit of approximately $30,133; a $70,310 (or 70%) reduction.
Lastly, there will be a fiscal impact to both the JRS and the State Employees' Retirement System (SERS) from limiting pension benefits to a single state employee pension plan, which will be reflected in the next SERS and JRS actuarial valuations. The fiscal impact will depend on the extent to which state employees with a vested SERS pension benefit elect to remain in SERS after being appointed as a judge, family support magistrate or compensation commissioner, as opposed to electing to enroll in JRS. It is anticipated a SERS member who, under the bill, elects to participate in JRS will be refunded their SERS contributions.
By way of example, the current average annual salary of a judge is approximately $150,664.6 Under the current formula a judge earning the average salary with three years of service will receive an annual benefit of approximately $100,443. Under the amendment the same judge will receive an annual benefit of approximately $30,133; a $70,310 (or 70%) reduction.
Section 253 modifies the process by which a municipality determines whether to allow the sale of alcoholic liquor and has no fiscal impact.
Section 254 expands the list of persons eligible to possess a firearm on school property as part of an agreement with a board of education and has no fiscal impact.
Section 255 results in a potential cost to the state as it notwithstands statutory requirements for grant application deadlines and authorization of a local share. The exact cost to the state cannot be determined as no grant application has been filed. The current school construction reimbursement rate for a renovation project in Torrington is 72.86%.
Sections 256, 257, 258 and 260 are repealers and are referenced in above sections.
Section 259 repeals CGS Sec. 19a-402, which moved the Commission on Medicolegal Investigations and the Office of the Chief Medical Examiner (CME) within the University of Connecticut Health Center for administrative purposes only. HB 5596 includes $193,660 and three full-time positions (two Fiscal Administrative Officers and an Accountant) to provide human resources and financial services support to CME in-house.
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.
1 HB 5596, as amended by House A, is the FY 15 Revised Budget that was passed by the General Assembly on 5/4/14.
2 Current law exempts any property developed, operated, or held by a private entity pursuant to a partnership agreement from property taxes.
3 The FY 15 ARC was established in the JRS actuarial valuation as of June 30, 2012.
4 For members hired after June 30, 2011, final salary is equal to a 5 year final average salary.
5 Source: Judges, Family Support Magistrates, and Compensation Commissioners Retirement System Actuarial Valuation as of June 30, 2012.
6 Source: Judges, Family Support Magistrates, and Compensation Commissioners Retirement System Actuarial Valuation as of June 30, 2012.