OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-5589

AN ACT CONCERNING CAMPAIGN FINANCE REFORM.

AMENDMENT

LCO No.: 8860

File Copy No.: 806

House Calendar No.: 379

Senate Calendar No.: 549


OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

Sections 1 – 9 include appropriations totaling $19.6 billion in FY 18 and $19.8 billion in FY 19. The table below summarizes the appropriations by fund.

Fund Summary

Fund

FY 18

FY 19

General Fund

18,839,417,242

19,178,981,426

Special Transportation Fund

1,524,169,702

1,637,701,530

Municipal Revenue Sharing Fund

-

-

Banking Fund

29,619,002

29,592,566

Insurance Fund

89,503,916

90,632,589

Consumer Counsel and Public Utility Control Fund

25,571,954

25,571,954

Workers' Compensation Fund

23,796,654

24,134,651

Mashantucket Pequot and Mohegan Fund

58,076,612

58,076,612

Regional Market Operation Fund

1,067,306

1,067,306

Criminal Injuries Compensation Fund

2,934,088

2,934,088

Total Gross Appropriations

20,594,156,476

21,048,692,722

General Fund Lapses

Unallocated Lapse

(40,000,000)

(40,000,000)

Unallocated Lapse - Legislative

(500,000)

(500,000)

Unallocated Lapse - Judicial

(3,000,000)

(3,000,000)

Targeted Savings

(54,655,117)

(68,271,251)

Achieve Labor Concessions

(836,900,000)

(1,081,300,000)

Total General Fund Lapses

(935,055,117)

(1,193,071,251)

Special Transportation Fund Lapses

   

Unallocated Lapse

(12,000,000)

(12,000,000)

Total Special Transportation Fund Lapses

(12,000,000)

(12,000,000)

Net Appropriations

General Fund

17,904,362,125

17,985,910,175

Special Transportation Fund

1,512,169,702

1,625,701,530

Municipal Revenue Sharing Fund

-

-

Banking Fund

29,619,002

29,592,566

Insurance Fund

89,503,916

90,632,589

Consumer Counsel and Public Utility Control Fund

25,571,954

25,571,954

Workers' Compensation Fund

23,796,654

24,134,651

Mashantucket Pequot and Mohegan Fund

58,076,612

58,076,612

Regional Market Operation Fund

1,067,306

1,067,306

Criminal Injuries Compensation Fund

2,934,088

2,934,088

Total Net Appropriations

19,647,101,359

19,843,621,471

Sections 10-18 establish revenue estimates by fund to support the appropriations contained in Sections 1-9.

Spending Cap

The amendment is under the spending cap by $750.7 million in FY 18 and $189.0 million in FY 19.  Pursuant to Section 86 of the amendment, these calculations reflect: 1) an allowable growth rate based on the greater of the five-year average growth in personal income on a calendar year basis or the 12-month increase in the Consumer Price Index for All Urban Consumers, All Items Less Food and Energy on a December-over-December basis, and 2) the elimination of the current exemption for certain grants to distressed municipalities.

Growth Rate

The FY 18 growth rate for the General Fund is 0.2% over FY 17 estimated expenditures. The FY 19 General Fund growth rate is 0.5% over FY 18. See the table below for details on other funds.

FY 18 and FY 19 Budget Growth Rates (by fund – in millions)

Fund

FY 17

FY 18

FY 18

FY 19

FY 19

Approp.

Approp.

Change

Approp.

Change

$

$

$

%

$

$

%

General

17,864.0

17,904.4

40.4

0.2%

17,985.9

81.5

0.5%

Transportation

1,463.4

1,512.2

48.8

3.3%

1,625.7

113.5

7.5%

Other Appropriated

411.8

230.6

(181.2)

-44.0%

232.0

1.4

0.6%

TOTAL

19,739.2

19,647.1

(92.1)

-0.5%

19,843.6

196.5

1.0%

Fund Balances

The table below compares revenue estimates established in the amendment to appropriations for FY 18 and FY 19.

FY 18 and FY 19 Fund Balances (in millions)

Fund

FY 18 $

FY 19 $

Approp

Revenue

Balance

Approp

Revenue

Balance

General

17,904.4

17,905.5

1.1

17,985.9

17,988.1

2.2

Transportation

1,512.2

1,588.5

76.3

1,625.7

1,628.1

2.4

Other Appropriated

230.6

234.1

3.5

232.0

239.2

7.2

TOTAL

19,647.1

19,728.1

81.0

19,843.6

19,855.4

11.8

Sections 19 - 40 of the back of budget language are identified below

Section

Agency

Description

19(a)

OPM/Various

OPM may make expenditure reductions of $837 million in FY 18 and $1.1 billion in FY 19 to reduce labor-management expenditures.

19(b)

OPM

OPM is authorized to make allotment reductions to the constituent units of higher education related to labor-management savings.

20(a)

OPM/Various

OPM shall recommend reductions in executive branch expenditures for FY 18 and FY 19 by $40 million.

20(b)

OPM/OLM

OPM shall recommend reductions in legislative branch expenditures for FY 18 and FY 19 by $500,000.

20(c)

OPM/Judicial

OPM shall recommend reductions in Judicial Department expenditures for FY 18 and FY 19 by $3 million.

21

DSS/DCF

Allows the Department of Social Services (DSS) and Department of Children and Families (DCF) to establish an account to allow for the receipt of reimbursement anticipated from the federal government. This allows the state to receive revenue as anticipated in the budget.

22

OPM

Exempts appropriations authorized for purposes of complying with Generally Accepted Accounting Principles (GAAP) from the quarterly allotment process pursuant to Section 4-85 of the Connecticut General Statutes.  This provision has no fiscal impact since these funds are non-programmatic and are only used in conjunction to close out the end of the fiscal year in accordance with GAAP.

23(a)(b)

RSA/OPM

Allows OPM to transfer funding to and from the Reserve for Salary Adjustments account (RSA) and other agencies for specific salary and wage related expenses.

24(a)

RSA/OPM

Allows for the unexpended funds for collective bargaining costs to be carried forward from FY 17 into FY 18 and FY 19.

24(b)

RSA/OPM

Allows for the unexpended funds for collective bargaining costs to be carried forward from FY 18 into FY 19.

25

Various

Allows for the transfer of funds between agencies via the use of FAC to maximize federal matching funds. This allows any General Fund appropriation to be transferred between agencies to maximize federal funding with FAC approval. Funds generated through transfer may be used to reimburse GF expenditures or expand programs as determined by Governor and with FAC approval.

26(a)(b)

Various

Allows for the adjustments to appropriations, with the approval of FAC, to maximize federal funding available to the state. This allows any General Fund appropriation to be adjusted by the Governor with FAC approval in order to maximize federal funding. The Governor shall present a plan for any such transfer.

27

UCHC/DSS

Allows for the transfer from the UConn Health Center to DSS's Medicaid account to maximize federal reimbursement. This allows the state to receive revenue as anticipated in the budget.

28

DSS/DMHAS

Directs DSS to make Disproportionate Share (DSH) payments to hospitals in the Department of Mental Health and Addiction Services (DMHAS) for operating expense and related fringes. This allows the state to receive revenue as anticipated in the budget.

29

DVA/DSS

Allows any appropriation made to the Department of Veterans Affairs in section 1 of the bill to be transferred to the Medicaid account within DSS for the purpose of maximizing federal reimbursement.

30

SDE/DDS

Transfers $1 million in both FY 18 and FY 19 of Part B IDEA (federal funds) from SDE to the Department of Developmental Services for the Birth-to-Three Program.

31(a)(b)

SDE

Ensures that money appropriated for the Priority School District grant in FY 18 and FY 19 is spent in the appropriate year, and through the appropriate sub-grant. This allows eligible school districts to receive funding.

32

DCF

Suspends the Department of Children and Families Single Cost Accounting System (SCAS), which results in savings of approximately $3.6 million in FY 18 and approximately $4.6 million in FY 19. Pursuant to CGS Sec. 17a-17 and agency regulations, SCAS determines the per diem payment rates for in-state, private residential treatment centers. Under SCAS, increases in the allowable residential care components over the previous year rates are limited to the increase in the consumer price index plus 2%, or the actual increase in allowable costs, whichever is less.

33(a)

DDS

Requires that DDS receive 100% reimbursement (or an alternative amount identified by DDS and approved by OPM) from private providers when actual expenditures are less than the amount received from the department in both FY 18 and FY 19. This gives DDS the discretion to allow providers to retain cost settlement funds which could reduce the savings associated with requiring that DDS receive 100% reimbursement.

33(b)

DMHAS

Requires that DMHAS receive 100% of reimbursement (or an alternative amount identified by the agency) for private providers where their actual expenditures are less than the amount received by the department for both FY 18 and FY 19.

34

WCC

Carries forward into FY 18 $1.4 million in Other Expenses for the development of the e-court migration project.

35

DMV

Allows the unexpended balance of funds for the Commercial Vehicle Information Systems Network Project within the Department of Motor Vehicles (DMV) to be carried forward into FY 18 and FY 19.

36(a)(b)(c)

DMV

Allows funds for the purpose of upgrading the registration and driver license data system within DMV and for the implementation of the Passport to State Parks program to be carried forward.

37

OSC

May result in a revenue loss to the General Fund by diverting any excess recoveries for the State Employees' Retirement System (SERS) to the SERS fund as opposed to the General Fund, which is current practice.  The section may reduce the state's SERS actuarially determined employer contribution (ADEC) to the extent excess recoveries are deposited in the SERS fund.  The impact to the SERS ADEC will be reflected in future SERS actuarial valuations.  There is no impact in FY 18 and FY 19, as the state's ADEC reflects what is certified in the June 30, 2016 SERS actuarial valuation

38

DDS/DSS/DMHAS

Prevents the Secretary of the Office of Policy and Management from assigning lapses or allotment reductions to certain accounts in the Department of Developmental Services, the Department of Social Services, and the Department of Mental Health and Addiction Services.

39

Probate

Precludes revenue gain to the General Fund by suspending the transfer from the Probate Court Administration Fund.

40

Municipalities

Removes the cap on motor vehicles of 32 set to go into effect in FY 18. Assuming that this results in municipalities setting motor vehicle mill rates equal to their real and personal property tax mill rates, this would preclude a revenue loss of approximately $110.8 million to municipalities and special taxing districts in FY 18 and FY 19.

General Fund Revenue Changes in millions

Section

Item

FY 18

FY 19

1

Net federal revenue gain from policy changes

60.0

68.3

41

DRS "Fresh Start" initiative

60.0

25.0

42

Modifications to ambulatory surgical centers tax

(1.0)

(1.0)

43 - 45

Phase-in federal exemption levels for Estate Tax

0.0

(15.6)

46 - 48

Lower Insurance Premiums Tax rate from 1.75% to 1.5%

(11.0)

(22.4)

49

Make moratorium on film production tax credits permanent

4.0

4.0

49

Allow entities with Film Production Tax Credits to apply against the Sales Tax at reduced rate

5.0

5.0

50

Make Insurance Premiums Tax 3-tier credit cap permanent

17.4

16.0

51

Reduce Transfer to CT-N

1.6

1.6

52

Limit the $200 property tax credit to those with dependents or the elderly

55.3

55.3

53

Exempt certain Pension and Annuity Income - 7 Year Phase-in

(8.2)

(24.6)

53

Exempt certain Social Security from State Income Tax

(7.9)

(16.3)

54

Eliminate the Angel Investor Tax Credit Program

3.0

3.0

55

Enact Graduated Rate for Earned Income Tax Credit

75.0

77.8

56

Eliminate CGS Sec. 12-265 exemption re: Cogeneration facility

3.7

3.7

57

Retain funds designated for the Municipal Video Competition Trust Account

2.0

2.0

58

Retain PEGPETIA surtax revenue

3.5

3.5

59

Repeal Exemptions from the Admissions Tax for Various Venues

2.0

2.0

60

Eliminate the Boxing Tax

0.0

0.0

61

Require Reductions to the CT Lottery Corporation Expenses

1.0

1.0

62

Increase criminal history record check fees

2.6

2.6

63

Increase land recording filing fee

1.7

1.7

64 - 65

Implement licensure of urgent care centers

0.4

0.0

66

License Public Water Systems

0.0

2.5

67

Reallocate support for newborn screening program to GF

3.1

3.1

68 - 69

Eliminate sales tax transfer to MRSA

327.8

335.4

68 - 69

Eliminate Transfer to the Regional Performance Incentive Account

10.7

10.9

68 - 69

Set aside a portion of Hotel Tax to support Marketing, Culture & Tourism

(12.8)

(13.4)

68 - 69

Transfer sales tax on motor vehicles to STF (5-year phase in)

0.0

0.0

70 - 71

Reflect Initiation of the State Park Pass / Passport to Parks

(7.3)

(7.3)

72

Increase civil penalties for certain healthcare facilities

0.3

0.3

73 - 74

Permanent Reduction to the Smart Start Account and Sweep of FY 17 Balance

14.5

8.5

73

Reduce Transfer to the Tobacco Health Trust Fund

6.0

6.0

75

Suspend FY 18 & FY 19 Deposits into Community Investment Act Account

19.0

19.0

76

Delay GAAP Amortization

57.5

57.5

77 - 78

Divert Energy Conservation and Loan Management Fund & Clean Energy Fund to the General Fund

81.0

81.0

79

Transfer from CHEFA

0.9

0.9

80

Transfer from the Regional Greenhouse Gas Initiative (RGGI)

26.0

26.0

84

Eliminate the green building tax credit program

0.7

0.7

85

Transfer FY 2018 Resources to FY 2019

(40.0)

40.0

87 - 110, 112

Eliminate Citizens' Election Program

23.4

11.4

111

Maintain the Neighborhood Assistance Act Tax Credit Cap at $5 million

5.0

5.0

n/a

Enact Auditor's Report re: Consolidate Collections by DAS

4.5

4.5

n/a

Enhance Collections

30.0

30.0

General Fund Total

820.4

814.6

Special Transportation Fund Revenue Changes in millions

Section

Item

FY 18

FY 19

68 - 69

Transfer sales tax on motor vehicles to STF (5-year phase in)

0.0

0.0

81

Modernize DOT Permit Fees for Access to State Highway Similar to MA

1.0

1.0

82

Reduce Transfer to the Emissions Enterprise Fund to Reflect Expenditures

1.0

1.0

83

Exempt aviation fuel

(7.0)

(7.8)

Special Transportation Fund Total

(5.0)

(5.8)

Sections 68 – 69 phases-in over 5 year a transfer of sales and use tax received on motor vehicle sales from the General to the Special Transportation Fund. The transfer begins in FY 20 with an estimated transfer of $66.9 million. The full phase-in will be completed in FY 25 at an estimated $350 million annually. 

The Out Years

Out year projections for biennial budget proposals are pending further analysis of the proposed SEBAC agreement.

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.