OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sHB-5282

AN ACT ESTABLISHING A REVOLVING LOAN FUND TO ASSIST ELDERLY HOMEOWNERS.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

Policy & Mgmt., Off.

Elderly Homeowner Property Tax Revolving Loan Fund- Cost

Up to 254,145

Up to 508,289

Policy & Mgmt., Off.

Elderly Homeowner Property Tax Revolving Loan Fund - See Below

See Below

See Below

Note: GF=General Fund

Municipal Impact:

Municipalities

Effect

FY 17 $

FY 18 $

Various Municipalities

Revenue Gain

Potential

Potential

Explanation

The bill establishes the Elderly Homeowner Property Tax Revolving Loan Fund, administered by the Office of Policy and Management (OPM). The fund will be used to provide loans to certain elderly property taxpayers who have failed to pay property taxes for two prior assessment years, and who meet other requirements. The bill requires revenue deposited into the fund to be used to cover the operating expenses of the fund.

The cost of providing the loans would vary based on the number of people eligible, and on the size of the loans they take out. The bill allows investment earnings, including the principal and interest on the loans, to be used to fund loans under the program. The bill provides credited investment earnings to the Fund but does not specify a funding source.

Depending on the number of people who apply for this loan, OPM could incur costs as high as $508,289 annually to administer the fund. This includes annual salary costs of $271,522 and annual fringe costs1 of $236,767 to hire an office assistant, a paralegal, a staff attorney, and an underwriter. It is anticipated that these costs would not be fully realized in FY 17, depending on the timing of personnel hires.

To the extent that the Elderly Homeowner Property Tax Revolving Loan Fund provides homeowners who owe unpaid taxes with a way of paying those taxes, there is a revenue gain to municipalities.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to the number of applicants and the value of the loans they receive.

1 The fringe benefit costs for employees funded out of other appropriated funds are budgeted within the fringe benefit account of those funds, as opposed to the fringe benefit accounts within the Office of the State Comptroller. The estimated active employee fringe benefit cost associated with most personnel changes for other appropriated fund employees is 87.20% of payroll in FY 17 and FY 18.