OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-502

AN ACT CONCERNING REVENUE AND OTHER ITEMS TO IMPLEMENT THE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2017.

AMENDMENT

LCO No.: 6490

OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

Section 501 requires the General Assembly to adopt municipal aid figures by April first annually. This has no fiscal impact.

Sections 502 and 503 allow municipalities to reduce their budgeted amount for education by any decrease in Educational Equalization Aid (ECS) and resulting in a potential savings to municipalities.

Section 504 removes a cap on municipal spending set to go into effect in FY 18, and also removes the penalty for violating the spending cap. This precludes 1) any restrictions on municipal spending as a result of the cap, and 2) any revenue loss a municipality would incur by exceeding the spending cap.

Section 505 increases the threshold at which the payment of prevailing wages to construction workers is required, from $400,000 up to $1.0 million for new construction projects and from $100,000 up to $500,000 for renovation and remodeling projects. This could potentially result in savings on the cost of state and municipal projects because it would permit the contractors and subcontractors for such projects to pay workers less than the prevailing wage.  This change results in significant savings to the state and municipalities primarily in bond funds (debt service payments) for new construction and renovation projects valued below these thresholds. 

Section 506 states that all state mandates to municipalities have to pass each chamber by a two-thirds vote.  This will not result in a fiscal impact.

Section 507 eliminates a requirement for municipalities to store possessions seized from certain defendants, and instead requires state marshalls to store such possessions. This results in a shift in the cost of storing such possessions from municipalities to state marshalls. As state marshalls are independent contractors for state agencies, it is unclear if the state would incur storage costs under the bill's provisions.

Section 508 allows municipalities to consolidate educational and non-educational expenditures. To the extent that this results in the more efficient delivery of municipal services, there is a potential savings.

Section 509 is not anticipated to result in a fiscal impact to municipalities.  For example, CGS 7-323t currently prohibits municipal employee contracts from containing a provision which disallows a paid firefighter from being a volunteer firefighter. 

Section 510 makes the uniform school calendar optional which potentially eliminates any savings associated with a uniform school calendar.

Section 511 prevents employee organizations from being a party to or objecting to an interlocal agreement. This has no fiscal impact

Section 512 will result in a fiscal impact to municipalities who participated in the Municipal Employees' Retirement System (MERS) from requiring employees hired on or after July 1, 2016 who otherwise would have been in MERS (a defined benefit plan) to join a defined contribution plan, to the extent permitted by collective bargaining.  Employees currently participating in MERS have the option to convert from the defined benefit plan to the defined contribution plan.  The impact will depend on the cumulative  employer contribution for the legacy defined benefit plan and new defined contribution plan. The impact to the current MERS plan will not be recognized until FY 18, as the FY 17 employer contributions are established as of the most recent MERS actuarial valuation (as of June 30, 2014). There will be a savings in the long term if the employer contribution to the defined contribution plan is less than the rate of contribution under the current defined benefit plan, which range from 10.91% (general employees without social security) to 16.73% (police and fire with social security).  This section is not anticipated to result in a fiscal impact to the state as the state as an employer does not currently participate in MERS and any administrative expenses are anticipated to be borne by the MERS fund or participating employers/employees in accordance with current practice for similar plans. 

Section 514 makes the uniform system of accounting for local and regional school districts optional and results in a potential savings to local and regional school districts.

Sections 515 to 518 create flexibility for teacher professional development and teacher evaluation and results in a potential savings to local and regional school districts.

Section 519 creates flexibility for student success plans and results in a potential savings to local and regional school districts.

Section 520 prevents a municipality's General Fund balance from being considered for collective bargaining arbitration and mediation purposes. This may result in a potential reduction in labor-related costs.

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.