AN ACT CONCERNING CAMPAIGN FINANCE REFORM.

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 $
Fund	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.