OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-7061

AN ACT CONCERNING THE STATE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2017, AND MAKING APPROPRIATIONS THEREFOR, AND OTHER PROVISIONS RELATED TO REVENUE, DEFICIENCY APPROPRIATIONS AND TAX FAIRNESS AND ECONOMIC DEVELOPMENT.

AMENDMENT

LCO No.: 9412


OFA Fiscal Note

SEE BELOW

COST IMPACT

The amendment lowers the FY 17 General Fund (GF) Reserve for Salary Adjustments (RSA) account appropriation from $99 million to $49 million. This results in a $50 million savings to the GF in FY 17.

The amendment increases the General Employee lapse from $7.1 million to $8.6 million in FY 16 and from $12.8 million to $14.3 million in FY 17. This results in a $1.5 million savings in both FY 16 and FY 17. The amendment also increases the Overtime Savings lapse from $10.5 million to $60.5 million, in both FY 16 and FY 17. This results in $50 million in savings in both FY 16 and FY 17.

Section 501 will result in savings of approximately $1.1 million, in both FY 16 and FY 17, from withholding salary increases for certain individuals in executive branch agencies.

Section 502 states that the Governor shall negotiate with the State Employees' Bargaining Agent Coalition to develop a plan to identify and collect $253 million in savings and credit the savings to the resources of the General Fund. There is no fiscal impact to negotiations and any savings are subject to the outcome of such negotiations.

REVENUE IMPACT

The amendment results in an annual revenue loss of $556 million beginning in FY 16 by requiring the Commissioner of Social Services to provide a refund to hospitals in the amount of hospital tax revenue collected by the state each fiscal year.

 The amendment also caps the maximum state hospital tax rate at 6%. There is no fiscal impact as federal law currently caps the tax rate at 6%.

The FY 16 – FY 17 revenue estimates, as adopted by the Finance, Revenue, and Bonding committee on June 1, 2015, include $556 million in FY 16 and FY 17 each associated with the hospital tax.

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.