OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-391

AN ACT CONCERNING THE RECOUPMENT OF STATE COSTS ATTRIBUTABLE TO LOW WAGE EMPLOYERS.

AMENDMENT

LCO No.: 4551

File Copy No.: 387

Senate Calendar No.: 267

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

The amendment strikes the language and its associated fiscal impact. The amendment results in increased payroll costs to the state and municipalities. The bill raises the state minimum hourly wage from $10.10 to $10.70 on January 1, 2018; from $10.70 to $11.30 on January 1, 2019; and from $11.30 to $12.00 on January 1, 2020.

Payroll Impact

An increase in the state minimum wage will have a fiscal impact on the payroll of state and municipal employees (primarily general workers, summer workers, seasonal workers, student and senior workers). There would also be a direct increase1 in social security fringe benefit costs. The state payroll and fringe costs are estimated to be $100,000 in FY 18, $300,000 in FY 19 and $450,000 in FY 202.

The bill also increases costs to municipalities that employ minimum wage workers. For example, New Haven employed approximately 1,100 minimum wage workers in FY 15. If New Haven continued to employ the same number of minimum wage workers that it had in FY 15, the city would incur increased costs of approximately $50,000 in FY 18, $150,000 in FY 19 and $250,000 in FY 20.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to the number of workers and hours employed.

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 Employers are liable for 6.2% Social Security and 1.45% Medicare taxes.

2 Estimate does not include costs to non-appropriated funds, such as the operating funds for the constituent units of higher education.