OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

HB-7501

AN ACT PROVIDING FOR THE CONTINUED OPERATION OF ESSENTIAL FUNCTIONS OF THE STATE.

AMENDMENT

LCO No.: 10069


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 18 $

FY 19 $

All

App Fund - See Below

See Below

See Below

Note: App Fund=All Appropriated Funds

Municipal Impact:

Municipalities

Effect

FY 18 $

FY 19 $

All Municipalities

Revenue Impact

See Below

See Below

Explanation

The bill includes: 1) General Fund appropriations of $18.4 billion in FY 18 and $18.6 billion in FY 19, 2) appropriations in nine funds totaling $20.5 billion in FY 18 and $20.8 billion in FY 19, 3) various policy changes that yield net revenue increases of $1.7 billion in FY 18 and $1.8 billion in FY 19, 8) revenue estimates adopted by the Finance Committee on 9/14/17, as adjusted to reflect new policies in this bill; and 9) various other provisions. The table below compares the revenue estimates to the appropriations included in the bill.

Comparison of FY 18 and FY 19 Appropriations to Revenue Estimates

Fund

FY 18 $

FY 19 $

Approp.

Revenue

Surplus/

(Deficit)

Approp.

Revenue

Surplus/

(Deficit)

General

18,439.3

18,439.9

0.6

18,654.3

18,656.4

2.1

Transportation

1,513.4

1,582.0

68.6

1,630.2

1,630.6

0.4

Municipal Revenue Sharing

415.7

415.8

0.1

367.4

368.0

0.6

Other Appropriated

185.7

187.0

1.3

201.8

202.7

0.9

TOTAL

20,554.2

20,624.7

70.6

20,853.6

20,857.7

4.1

Appropriations

Sections 1 – 12 include appropriations by agency and line items totaling $20.5 billion in FY 18 and $20.8 billion in FY 19.

Fund Summary of FY 18 and FY 19 Appropriations

 

Legislative

Gross Appropriations by Fund

FY 18 $

FY 19 $

General Fund

19,277,349,412

19,660,866,834

Special Transportation Fund

1,525,406,147

1,642,193,763

Municipal Revenue Sharing Fund

415,686,503

367,393,120

Banking Fund

27,413,284

27,386,848

Insurance Fund

87,299,099

92,100,163

Consumer Counsel and Public Utility Control Fund

25,571,954

25,571,954

Workers' Compensation Fund

24,652,430

24,940,502

Mashantucket Pequot and Mohegan Fund

1,000,000

1,000,000

Regional Market Operation Fund

1,067,306

1,067,306

Criminal Injuries Compensation Fund

2,934,088

2,934,088

Passport to Parks Fund

6,084,067

11,843,074

Tourism Fund

9,714,076

14,913,190

Total Gross Appropriations

21,404,178,366

21,872,210,842

General Fund Lapses

Unallocated Lapse

(42,250,000)

(35,000,000)

Unallocated Lapse - Legislative

(1,000,000)

(1,000,000)

Unallocated Lapse - Judicial

(3,000,000)

(8,000,000)

Targeted Savings

(79,500,000)

(95,000,000)

Reflect Delay

(12,250,000)

-

Achieve Labor Concessions

(700,000,000)

(867,600,000)

Total General Fund Lapses

(838,000,000)

(1,006,600,000)

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

18,439,349,412

18,654,266,834

Special Transportation Fund

1,513,406,147

1,630,193,763

Municipal Revenue Sharing Fund

415,686,503

367,393,120

Banking Fund

27,413,284

27,386,848

Insurance Fund

87,299,099

92,100,163

Consumer Counsel and Public Utility Control Fund

25,571,954

25,571,954

Workers' Compensation Fund

24,652,430

24,940,502

Mashantucket Pequot and Mohegan Fund

1,000,000

1,000,000

Regional Market Operation Fund

1,067,306

1,067,306

Criminal Injuries Compensation Fund

2,934,088

2,934,088

Passport to Parks Fund

6,084,067

11,843,074

Tourism Fund

9,714,076

14,913,190

Total Net Appropriations

20,554,178,366

20,853,610,842

Spending Cap

The amendment is under the spending cap by $214.8 million in FY 18 and $272.5 million in FY 19.  Pursuant to section 272 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, 2) the elimination of the current exemption for certain grants to distressed municipalities, 3) that appropriations for the unfunded liabilities of the State Employees' Retirement System, Judges, Family Support Magistrates and Compensation Commissioners Retirement System, and Teachers' Retirement System are exempt from being counted as general budget expenditures under the spending cap, and 4) the requirement that a base adjustment be made under certain enumerated circumstances.

Growth Rate

The FY 18 growth rate for the General Fund is 3.2% over FY 17 estimated expenditures.1 The FY 19 General Fund growth rate is 2.1% 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

18,439.3

575.4

3.2%

18,654.3

214.9

1.2%

Transportation

1,463.4

1,513.4

50.0

3.4%

1,630.2

116.8

7.7%

Municipal Revenue Sharing

185.0

415.7

230.7

124.7%

367.4

(48.3)

-11.6%

Other Appropriated

226.8

185.7

(41.1)

-18.1%

201.8

16.0

8.6%

TOTAL

19,739.2

20,554.2

815.0

4.1%

20,853.6

299.4

1.5%

Section 13(a) states that the Office of Policy and Management (OPM) shall recommend reductions in the General Fund in order to reduce labor-management expenditures in FY 18 by $700,000,000 and FY 19 by $867,600,000.

Sec. 13(b) requires any allotment reduction to a higher education constituent unit to be credited to the General Fund, which results in a savings to the General Fund and an equivalent revenue loss to the constituent unit(s).

Section 14(a) states that OPM shall recommend reductions in executive branch expenditures in FY 18 by $42,500,000 and FY 19 by $35,000,000.

Section 14(b) states that OPM shall recommend reductions in legislative branch expenditures in FY 18 and FY 19 by $1,000,000.

Section 14(c) states that OPM shall recommend reductions in judicial branch expenditures in FY 18 by $3,000,000 and FY 19 by $8,000,000.

Section 15 states that OPM shall recommend reductions in expenditures to achieve targeted savings in FY 18 by $79,500,000 and FY 19 by $95,000,000.

Section 16 states that OPM shall recommend reductions in expenditures in any budgeted agency to achieve savings in FY 18 by $12,250,000.

Section 17 states that OPM shall recommend reductions in expenditures in the Special Transportation Fund in FY 18 and FY 19 by $12,000,000.

Sec. 18 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.

Section 19 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 to close out the end of the fiscal year in accordance with GAAP.

Section 20(a) allows OPM to transfer amounts from Personal Services accounts in any appropriated fund to the RSA account to reflect the impact of collective bargaining related costs.

Section 20(b) allows OPM to transfer amounts from the RSA account into any agency to give effect of salary increases and accrued payments. The appropriations in the General Fund RSA account are $317,050,763 in FY 18 and $484,497,698 in FY 19.

Section 21(a) allows for the unexpended funds for collective bargaining costs to be carried forward from FY 17 into FY 18 and FY 19. It is estimated up to $33,462,326 in the General Fund and up to $11,667,593 in the Special Transportation Fund will be carried forward.

Section 21(b) allows for the unexpended funds for collective bargaining costs to be carried forward from FY 18 into FY 19.

Section 22 allows for the transfer of funds between agencies via the use of Finance Advisory Committee (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.

Section 23 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.

Sec. 24 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.

Sec. 25 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.

Sec. 26 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.

Section 27 transfers $1 million in both FY 18 and FY 19 of Part B IDEA (federal funds) from SDE to the Office of Early Childhood for the Birth-to-Three Program.

Section 28 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. The funding for both FY 18 and FY 19 totals $38.1 million.

Section 29 suspends the Department of Children and Families (DCF) 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 to DCF. 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.

Section 30 transfers $750,000 in both FY 18 and FY 19 from the Tobacco and Health Trust Fund to the Department of Social Services to implement recommendations of an autism study conducted pursuant to PA 11-6.

Section 31(a)(b) requires that DDS and DMHAS receive 100% of reimbursement (or an alternative amount identified by the agency and approved by OPM) for private providers when their actual expenditures are less than the amount received by the Departments for both FY 18 and FY 19. This gives the agencies discretion to allow providers to retain funds, which could reduce state savings.

Section 32 allows the unexpended balance of approximately $973,062 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.

Section 33(a)(b)(c) allows the unexpended balance of approximately $8,693,716 for the purpose of upgrading the registration and driver license data system within DMV.

Section 34(a) provides up to $40,000 in both FY 18 and FY 19 to the State Department of Education (SDE) for the Bridge Family Center in West Hartford.

Section 34(b) provides up to $80,000 in both FY 18 and FY 19 to SDE for the New Haven Reads program.

Section 34(c) provides up to $125,000 in both FY 18 and FY 19 to SDE for the Career Pathways TECH Collaborative at Eli Whitney Technical High School in New Haven.

Section 34(d) provides $915,000 in both FY 18 and FY 19 to SDE for a magnet school reimbursement grant to East Hartford.

Section 34(e) provides up to $463,479 in both FY 18 and FY 19 for Project Oceanology.

Section 35 transfers $1 million in both FY 18 and FY 19 from the Tobacco and Health Trust Fund to the University of Connecticut Health Center to support the Connecticut Institute for Clinical and Translational Science (CICTS).

Section 36 carries forward $600,000 in OLM in Personal Services from FY 17 into FY 18.

Section 37(a) carries forward the unexpended balance in Personal Services from FY 17 into FY 18 for the Commission on Equity and Opportunity. It is estimated that $109,932 will be carried forward.

Section 37(b) carries forward the unexpended balance in Personal Services from FY 17 into FY 18 for the Commission on Women, Children and Seniors. It is estimated that $118,413 will be carried forward.

Sec. 38 integrates Even Start into the state-wide two-generational initiative of the Office of Early Childhood.

Section 39 carries forward $82,600 in DAS for the Office of the Claims Commissioner in Other Expenses.

Section 40 requires any municipality operating more than one family resource center (FRC) to close one location. This may result in revenue loss to municipalities, as the FRC grant is currently $103,000 per center. Additionally, Section 40 makes the family resource center a non-lapsing account and allows municipalities to apply for a grant for any funds that are appropriated but not expended. This may result in a revenue increase to municipalities applying for the grant.

Section 41 implements savings in the budget by reducing the state's share of both the Teachers' Retirement Board retiree health services costs, and the municipal retiree health insurance costs, from 33% to 25%. This results in a reduction of $8.5 million in FY 18 and $9.7 million in FY 19 in the retiree health service cost account and a reduction of $1.5 million in both FY 18 and FY 19 in the municipal retiree health insurance cost account. The reduction in the state payment is offset by a corresponding increase in the amount paid by the retired teachers' health insurance premium account. The retired teacher share of the TRB health plan remains unchanged.

Section 42 requires the Teachers' Retirement Board (TRB) to conduct a study of actuarial assumptions that may result in a cost for actuarial consulting to the agency. It also requires the TRB to adopt four factors beginning with the next Teachers' Retirement System (TRS) valuation on June 30, 2018. This requirement has no fiscal impact to the state contribution to the TRS in FY 18 and FY 19. The 2018 valuation will establish the contribution due in FY 20 and FY 21.  The first factor, the annual rate of return assumption, is set by the TRB and, therefore, this reflects current practice. The remaining three factors impact the future calculation of the amortization of the TRS unfunded liability.

Sections 43 and 44 increases, from $4 million to $7 million, the amount of funding required to be deposited into the newly created Municipal Gaming Account. It also require funding of $3 million from the account to be used, beginning in FY 20, to make grants of $750,000 each to Bridgeport, New Haven, Norwalk, and Waterbury. This results in a revenue gain to those four towns, beginning in FY 20, and a corresponding reduction in the available balance of the Municipal Gaming Account.

Section 45 allows DSS, with OPM's approval, to transfer funds in the Medicaid and Community Residential Services accounts to DDS to reflect the distribution of costs for personal care attendants.

Section 46 does not result in a fiscal impact to the state. It requires OPM to inform the Department of Insurance, by 10/15/17, of the amount to be assessed through the Health and Welfare Fee. The Health and Welfare Fee assessment supports the Department of Public Health's Immunization Services account.

Section 47 allows OPM, with the approval of the Finance Advisory Committee to transfer appropriations between any budgeted agency in FY 18. This will not result in a fiscal impact.

Section 48 precludes revenue gain of $6 million in FY 18 from the Probate Court Administration Fund to the General Fund by suspending the transfer of any amount in balance over 15% of the Probate Court Administration operating costs.

Section 49 allocates $500,000 to the City of Hartford Department of Families, Children, Youth and Recreation and $500,000 to the Capital Region Workforce Investment Board in FY 18 from the Summer Youth Employment Program.

Sections 50-61 adopt revenue estimates for the 2018-2019 Biennial Budget.  These estimates are the sum total of: 1) May 1, 2017, consensus estimates of current law revenues; and 2) revenue estimates or targets of the various policy changes in the bill or otherwise anticipated.

Section 62 provides funding of $400,000 in both FY 18 and FY 19 to the Department of Energy and Environmental Protection (DEEP) for grants-in-aid in equal amounts to each bottle redemption center, implementing the budget. 

Sections 63-64 remove the requirement that a portion of the E-911 fund within the Department of Emergency Services and Public Protection (DESPP) be diverted into the Firefighters Cancer Relief Fund. There is no fiscal impact to the General Fund, however there is expected to be a revenue gain to the E-911 fund resulting from this section, as a portion of those funds are no longer being diverted to the cancer relief fund.

Section 65 does not result in a fiscal impact. 

Section 66 allows municipalities to consolidate assessors' offices. To the extent that municipalities do not currently share assessment services, there is a potential savings that will vary based on the terms of any assessment sharing agreement.

Section 67 establishes a task force within the legislative branch to examine the use of body-worn recording equipment by state and municipal police.  This will not result in a fiscal impact.

Section 68 results in potential savings to municipalities, which extends, by one calendar year, the application period for reimbursement of purchases related to body worn cameras. To the extent municipalities purchase related equipment, they would have otherwise not been reimbursed by the state, creating savings.

There is no fiscal impact to the general fund because the funding is bonded and constricted to use for reimbursement for body worn camera equipment.

Sections 69-71 authorize the Office of the State Treasurer to issue bonds backed by revenue generated from the withholding portion of the State Income Tax in lieu of General Obligation (GO) bonds. Similar initiatives in other jurisdictions have lowered borrowing costs.

The sections direct any savings from the initiative to the Budget Reserve Fund, which should help to shore up Connecticut's credit over time, thus reducing borrowing costs in the long-term. In addition, indications are that the new type of borrowing authorized in the bill may be viewed more favorably in bond markets because it is linked directly to a large and relatively stable revenue source. If such is the case, then near-term debt service savings could be achieved.

While the state should realize a significant decrease in the costs of borrowing, and therefore debt repayment, these savings would not necessarily reduce expenditures in the General Fund in any given year unless the requirements to access the balance of the Budget Reserve Fund are met.

Section 72, which alters the duration of permits for certain raffles, does not result in any fiscal impact.

Section 73 adds an additional member (chief elected municipal official) to the Teachers' Retirement Board and has no fiscal impact.

Section 74-77 delays raises for judges until FY 20 and results in savings of approximately $1.1 million in FY 18 and $1.5 million FY 19.

Section 78 requires the Department of Correction (DOC) and the Secretary of the Office of Policy and Management to submit a progress report on the request for information regarding DOC inmate medical services.  This results in no fiscal impact to the state.

Section 79 reduces payments to full-time municipal health departments and health districts, pursuant to CGS Sections 19a-202 and 19a-245, on a pro rata basis in an aggregate amount equal to $921,020 in FY 19.

Sec. 80 requires Connecticut Innovations, a quasi-public state agency, to provide a grant-in-aid of $350,000 in FY 18 and 19 to the Women's Business Development Council in Stamford. This shifts the cost of the grant from General Fund appropriations to the Resources of Connecticut Innovations.

Sections 81 – 98 and 750 make changes to the Department of Public Health's (DPH) Office of Health Care Access' Certificate Of Need (CON) system. Two Health Care Analysts are provided to accommodate the changes under the bill. The annualized DPH cost of $144,407 and associated State Comptroller fringe benefits cost of $54,990 will be recouped as General Fund revenue through a hospital assessment. Per CGS Sec. 19a-631 and 632, each hospital annually pays to DPH, for deposit in the General Fund, an amount equal to its share of the actual expenditures made by OHCA during each fiscal year, including the cost of fringe benefits for office personnel as estimated by the Comptroller.

Section 99 allows the Health Care Cabinet to study and report on health care providers who refer patients to health care facilities where either the provider or their immediate family member has a beneficial interest or compensation arrangement through such facility.   There is no fiscal impact as the Health Care Cabinet and Office of Health Strategy have the necessary expertise to handle the bill's requirements.

Sections 100-108 cap various formulaic grants. It is estimated that capping these grants results in a savings to the state and a corresponding revenue loss to municipalities of approximately $57.1 million in FY 18 and $63.4 million in FY 19.

Section 109 provides any youth service bureau that applied for a grant during FY 17, with prior approval of the town's contribution, shall receive a grant. This could result in a revenue gain for municipalities that applied for a new youth service bureau in FY 17, and a corresponding revenue loss to existing youth service bureaus, as the grant would be provided within available appropriations, and the existing youth service bureaus with be prorated accordingly.

Sections 110 and 111 require that the Health Information Technology Officer (HITO), funded under the Department of Insurance, seek funding for, administer, and maintain the all-payer claims database (APCD), which does not result in a fiscal impact to the state or municipalities. An existing APCD statute (CGS Sec. 38a-1091) is repealed in Section 751.

Section 112 establishes a consumer health information website (replacing CGS Sec. 38a-1084a, repealed in Section 751), which is to be maintained by the HITO, and is not anticipated to result in a fiscal impact.

Sections 113-122 make conforming and technical changes that are not anticipated to result in a fiscal impact to the state or municipalities.

Sections 123-126 make clarifying changes to HITO responsibilities, and the State Health Information Technology Advisory Council, that are not anticipated to result in a fiscal impact.

Section 127 establishes a new Office of Health Strategy (OHS). Five positions and associated Insurance Fund support of $3,115,486 for the State Innovation Model Initiative are transferred from the Office of the Healthcare Advocate to OHS in FY 19. One position and associated Insurance Fund support of $262,978 are transferred from the Department of Insurance to OHS in FY 19. Twenty-three positions and associated General Fund support of $1,975,432 for OHCA is transferred to OHS in FY 19. A total of 29 positions and $5,353,896 is transferred to OHS in FY 19.

Section 128 is not anticipated to result in a fiscal impact to the state as it requires the Office of Policy and Management (OPM) in collaboration with the Health Information Technology Officer (HITO) and other parties to assist with development of a program to expedite the State-wide Health Information Exchange, which is within the expertise of the entities.  In addition, this section allows the HITO and OPM to establish or incorporate an entity to implement the program establish.  Any entity created is not a state entity and therefore not anticipated to result in a fiscal impact to the state. 

Sections 129 and 130 establish, in FY 19, a safe drinking water primacy assessment anticipated to generate $2.5 million in General Fund revenue in FY 19. Each nontransient noncommunity public water system and community water system having less than 50 service connections will be assessed $125 per service connection. Each community water system having at least 50 but less than 100 service connections will be assessed $150 per service connection. Each community water system having at least 100 service connections will be assessed an amount not to exceed $4 per service connection.

Sections 131–133 establish an urgent care licensure category under the Department of Public Health (DPH) and a $1,000 fee for the licensing and inspection, every three years, of these centers. Funding of $126,995 in FY 18 and $137,534 in FY 19 is provided to DPH for a full-time Health Program Associate, a half-time Supervising Nurse Consultant, and a half-time Processing Technician to implement this licensure category.

Sections 134 and 135 are not anticipated to result in a fiscal impact to the state as the state health plan is a self-insured plan and does not provide coverage of the services being repealed.  In addition, these sections are not anticipated to have a fiscal impact on the state, pursuant to the ACA, or to fully insured municipal plans as the coverage provisions being repealed are not anticipated to materially change the scope of benefits currently provided.

Sections 136 through 141 have no fiscal impact.

Section 142 freezes rate increases for the Temporary Family Assistance (TFA) and State Administered General Assistance (SAGA) programs, resulting in savings to the Department of Social Services (DSS) of $1.3 million in FY 18 and $3.7 million in FY 19.

Section 143 applies any federal cost of living adjustments (COLAs) to offset the cost of care for individuals in the Old Age Assistance, Aid to the Blind, and Aid to the Disabled (also referred to as supplemental assistance) programs, resulting in savings to DSS of $1.2 million in FY 18 and $2.6 million in FY 19. Section 8 also freezes rate increases for the supplemental assistance programs, resulting in additional savings of $261,200 in FY 18 and $751,000 in FY 19.

Sections 144-147 limit increases in rates paid to certain facilities with exceptions, which is anticipated to result in savings of approximately $1.5 million in FY 18 and $3.0 million in FY 19.

Section 148 limits increases in nursing home rates with certain exceptions, which is anticipated to result in savings of approximately $27.3 million in FY 18 and $42.5 million in FY 19.

Section 149 makes a technical change that conforms to current practice and has no fiscal impact.

Section 150 limits increases in rates paid to intermediate care facilities for individuals with intellectual disabilities (ICF-IDs) with certain exceptions, which is anticipated to result in savings of approximately $1.1 million in FY 18 and $2.3 million in FY 19.

Section 151 suspends the Department of Children and Families (DCF) 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 to DCF. 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.

Sections 152-154 allow the Department of Social Services (DSS) to revise the reimbursement methodology and professional dispensing fees for certain drugs to comply with federal regulations, which is anticipated to result in a cost of $4.9 million in FY 18 and $5.1 million FY 19.

Section 155 limits enrollment in the Connecticut Home Care Program for Elders (CHCPE), resulting in savings of approximately $2.9 million in FY 18 and $8.6 million in FY 19.

Section 156 reduces income eligibility for HUSKY A adults, resulting in savings of $500,000 in FY 18 and $11.3 million in FY 19.

Section 157 has no fiscal impact.

Section 158 prohibits certain cost sharing, which could limit the ability of DSS to achieve future savings.

Sections 159 and 160 establish a cap, with exceptions, on DSS payments for nonemergency dental services for individual adults on Medicaid of $1,000, resulting in savings of approximately $2.0 million in FY 18 and $2.5 million in FY 19.

Section 161 reduces eligibility for the Medicare Savings Program (MSP), which is anticipated to result in savings of $20.4 million in FY 18 and $61.5 million in FY 19, with a corresponding revenue gain of $33.4 million in FY 18 and $68.5 million in FY 19.

Section 162 requires the Intellectual Disability Partnership to form an intellectual disability advisory committee and has no fiscal impact.

Section 163 conforms to current practice and has no fiscal impact.

Section 164 requires that the conversion to a fee-for-service payment methodology under the Birth to Three program occurs no earlier than November 1, 2017, which is not anticipated to result in a fiscal impact.

Section 165 allows the state to fund certain family planning services if federal funding is restricted, which could result in a cost to the state. The federal share of FY 17 related expenditures was $5.7 million.

Section 166 allows DSS to eliminate home health care add-on payments in FY 18 and FY 19. The budget assumes related savings of $2.1 million in FY 18 and $1.7 million in FY 19.

Section 167 makes a conforming change and has no fiscal impact.

Section 168 makes the two-generational pilot program under the Department of Labor an initiative under the Office of Early Childhood (OEC). The budget includes associated funding of $750,000 in FY 18 and FY 19 in OEC.

Sections 169-181 authorize a new professional licensure category under the Department of Public Health (DPH) for Behavior Analysts and establish a separate, non-lapsing account to contain licensure fee revenue ($350 for the initial license and $175 for annual renewal) sufficient to cover costs to DPH for staff and equipment necessary to implement licensure. There is no fiscal impact to the General Fund from these sections of the bill.

Sections 182 allows DSS to establish a twelve month pilot project with a Torrington community action agency. Section 183 appropriates funding of $100,000 to support rental and overhead expenses associated with relocating DSS staff from the Torrington regional office to the community action agency and for additional costs related to service delivery.

Section 184 makes conforming changes and has no fiscal impact.

Section 185 conforms to federal requirements and is not anticipated to result in a fiscal impact.

Section 186 reduces benefit payments under the State Administered General Assistance (SAGA) program, resulting in savings of approximately $2 million in both in FY 18 and FY 19.

Sections 187-190 require local and regional boards of education to enroll as Medicaid providers to participate in the School Based Child Health program. This could result in an annualized revenue gain of up to $3.2 million to various local and regional boards of education not currently participating and a corresponding revenue gain to the state.

Section 191 makes a technical change and has no fiscal impact.

Sections 192-204 implement the transfer of the Abuse Investigations Division of the Office of Protection and Advocacy from Department of Rehabilitation Services (DORS) to the Department of Developmental Services (DDS).  The amendment reflects the associated transfer of 12 positions and $1.0 million in both FY 18 and FY 19.

Section 205 eliminates the transfer from the Transportation Fund to the DSS to reflect supporting the transportation for employment independence program in the Department of Transportation (DOT) instead of DSS, as reflected in the budget.

Section 206 does not result in a cost to the Office of Policy and Management or the Department of Administrative Services to provide a report with recommendation on potential savings measure for the state's workers' compensation program as it is within the agencies' expertise.

Section 207 requires the Materials Innovation and Recycling Authority (MIRA) to make a $1 million payment to the City of Hartford, in lieu of taxes, no later than December 31, 2017.  This results in a $1 million revenue gain to the City of Hartford and a cost of $1 million to MIRA, which is a quasi-public entity.   

Sections 208-210 require the Office of Policy and Management to determine the distribution of $2.8 million in FY 18 and $5 million in FY 19 appropriated for regional councils of government (COGs) and provides stipulations under which COGs may receive the money. The bill also allows COGs to enter revenue sharing agreements. The impact of this would vary based on the terms of such agreements.

Sections 211–213 make a technical change to the Criminal Justice Information System, which does not result in a fiscal impact.

Sections 214-216 transfer the Criminal Justice Information System from the Office of Policy and Management to the Department of Emergency Services and Public Protection. This results in no net fiscal impact to the general fund, as all funds associated with the administration of CJIS are transferred to DESPP from OPM.

Sections 217-218 make technical corrections to the responsibilities of the Connecticut Advisory Commission on Intergovernmental Relations that will not result in a fiscal impact.

Sections 219-221 result in a state mandate and a potential cost to local and regional school districts, associated with age appropriate computer programming, including coding. The potential cost to districts will be dependent upon the size of the district and the extent to which computer programming is already offered. These sections are effective from passage and will impact the current school year.

Section 222 allows the Office of Policy and Management to proportionately reduce payments under the Elderly Circuit Breaker program in the event that payments exceed FY 18 or FY 19 appropriations. To the extent that the cost of the program exceeds appropriations, this results in a General Fund savings in each fiscal year.

Section 223 eliminates a provision allowing an elderly renter to extend the application period for the Renters' Rebate program. This has no fiscal impact.

Section 224 delays, until February 15, 2020, the date by which the Department of Revenue Services must complete the next biennial tax incidence report.  This results in a one-time savings of approximately $200,000 in FY 19.

Section 225 increases, from $175 to $500, the additional compensation paid to arbitrators of the State Board of Mediation and Arbitration for preparing a written decision.  This results in a cost of approximately $30,000 in FY 18 and $40,000 annually thereafter.

Section 226 states that the DAS Commissioner may designate other state agencies to establish policies and procedures for the certain use of parking areas under their supervision.  Anyone in violation may be fined not more than $75.  To the extent any such violations occur, it would result in a potential minimal revenue gain in both FY 18 and FY 19.

Section 227 makes a technical clarifying change that does not result in any fiscal impact.

Section 228 allows the DAS Commissioner to extend any candidate list scheduled to expire on June 7, 2017 to a date not later than December 31, 2018.  This will not result in a fiscal impact.

Sections 229-234 extend the FMLA provisions incorporated in the SEBAC agreement to include non-unionized employees of the state and municipalities.  This will result in costs to agencies and municipalities to cover shifts for those employees taking leave under the provisions in the bill.  These costs could potentially be significant.

Sections 235-250 establish the Connecticut Municipal Redevelopment Authority (CMRA). It allows the CRMA, after entering into a memorandum of understanding (MOU) with an affected municipality, to develop property and manage facilities in certain developments.

To the extent that development of property results in increased property values in affected districts, affected municipalities would experience a grand list increase. This increase would result in additional property tax revenue, given a constant mill rate. Any other impact to municipalities would depend on the terms of any MOUs the CRMA enters into with them.

The bill also allows the CRMA and the Capital Region Development Authority (CRDA) to enter into a memorandum of understanding (MOU) that will allow CRDA to provide administrative support to the authority. The bill allows the MOU to include terms for reimbursement by the authority to CRDA for such services. There is therefore no fiscal impact to CRDA.

Section 251, which removes the requirement that the University of Connecticut construction assurance director be full-time, may result in potential savings to the university in salary and fringe costs, if the position becomes part-time.  The full-time director position's current salary is approximately $124,500 and benefits total $79,600.

Section 252 awards grants to various organizations from the Youth Services Prevention account, totaling approximately $3.1 million in FY 18 and FY 19.

Section 253 states that the Legislative Commissioners' Office shall make technical changes as necessary to carry out the provisions in this act.  This has no fiscal impact.

Sections 254-256: establish a $12 surcharge on homeowner's insurance policies which will generate approximately $9 million per year.  The revenue will be deposited into the Healthy Homes Fund. The fund will support any necessary staffing in the Department of Housing, grants-in-aid to structurally damaged homes along the West River in Westville, funding the Department of Housing activities related to abatement of lead and other contaminants, and funding the activities of the captive insurance company.  At least eighty-five percent of the money in the account will be used to fund the activities of the captive insurance company.

These sections also require the Department of Housing (DOH) to provide advice and assistance, manage state activities, and coordinate state programs related to the crumbling foundations issue. Section 1 of the bill provides funding for one position under DOH to support crumbling foundation activities.

Section 257 establishes the Crumbling Foundations Assistance Fund.  The account contains any monies required by law and voluntary contributions.  The money will be used to incorporate the captive insurance company and provide financial assistance to owners of concrete foundations affected by pyrrhotite.  The bonding section of this bill authorizes $10 million in bonding in FY 18 and 19 to fund the Crumbling Foundations Assistance Fund.

Section 258 establishes a captive insurance company will be established by the board of directors for the purpose of providing various assistance and services to owners of concrete foundations affected by pyrrhotite.  Employees of the captive insurance company are not state employees and the captive insurance company will not be required to pay a license fee or renewal fee. 

Section 259 has no fiscal impact by requiring the Connecticut Housing Finance Authority (CHFA), a quasi-public state agency, to administer a Collapsing Foundations Credit Enhancements Program, the purpose of which is to assist impacted homeowners obtain necessary funding for replacement or repair of concrete foundations.

As CHFA is primarily tasked with (1) seeking participation of lenders to participate in providing qualifying loans and (2) developing the terms of the program, there is no fiscal impact to the agency. CHFA has expertise with administering home loan programs and therefore can develop this program with existing resources.

Section 260 prohibits construction use of recycled material known to contain pyrrhotite unless a specified standard is met, and makes such use a violation of the Connecticut Unfair Trade Practices Act (CUTPA). As it is anticipated that there will be few, if any, violations, the Department of Consumer Protection has sufficient personnel to enforce this section, and no additional revenue is anticipated. A CUTPA violation can yield a fine of up to $25,000 per instance.

Section 261 prohibits town building officials from collecting educational or application fees for buildings that contain pyrrhotite. To the extent that towns and the state building inspector would have otherwise charged such fees, there is a revenue loss to towns and the General Fund.

To the extent municipalities opt to participate in programs that provide assistance to homeowners with crumbling foundations, there is an avoidance of a grand list reduction from the bill. In the absence of any assistance, homes with crumbling foundations would lose assessment value, and therefore reduce the amount of taxable property within a given municipality.

Section 262 requires the Department of Consumer Protection (DCP) to adjust residential disclosure report regulations to include property foundation questions and an advisory related to foundation inspection.  As DCP has sufficient expertise to revise regulations in this way, no fiscal impact is anticipated.

Section 263 specifies various insurance company practices and results in no fiscal impact to the state.

Section 264 establishes a deduction against the state income tax for financial assistance received from the Crumbling Foundations Assistance program established under the bill.  To the extent such assistance is received by state income tax filers, this result in a General Fund revenue loss as early as FY 18.

Section 265 permits municipalities to jointly finance repairs to homes with crumbling foundations. To the extent towns opt to join together to finance such projects, there is a cost to such initiatives.

Section 266 permits municipalities to bond for repairs to properties affected by pyrrhotite. To the extent a town opts to borrow for such repairs, there are associated costs.

Sections 267-268 establish a working group to model a quality control plan for quarries and if a standard is established for the presence of pyrrhotite in concrete the seller will provide the purchaser a notice.  These sections result in no fiscal impact to the state.

Section 269 does not result in a fiscal impact as it eliminates a requirement for the Department of Transportation to complete an assessment for certain transportation projects that are classified as maintaining the state's infrastructure in good repair or are less than $150 million.

Section 270 requires municipalities and regional councils of government to develop plans for sharing certain services. This has no fiscal impact.

Sections 271-275 implement limitations on the amount of General Fund and Special Transportation Fund revenue that may be utilized for unrestricted general budget expenditures, establish a bond covenant requirement, and make various definitional changes to the statutory spending cap.

Section 271 specifies that, beginning in FY 18, any revenue from Estimated and Final payments under the Personal Income Tax in excess of $3.15 billion be diverted to the Budget Reserve Fund.  This reduces General Fund revenue and increases Budget Reserve Fund revenue by approximately $64.6 million, $66.5 million, and $69.2 million in FY 20, FY 21, and FY 22, respectively (to the extent that actual revenue exceeds $3.15 billion in FY 18 and FY 19, there is a potential impact within the biennium).  This section also increases the cap on the Budget Reserve Fund from 10% to 15% of net General Fund appropriations.

Additionally, section 272 caps General Fund and Special Transportation Fund expenditures at a specified percentage of estimated revenues according to the following schedule:

FY

Percentage

of Estimated Revenue

20

99.5%

21

99.25

22

99.0

23

98.75

24

98.5

25

98.25

26

98.0

This reduces revenue available for General Fund appropriations by $92.8 million, $140.4 million, and $188.6 in FY 20, FY 21, and FY 22, respectively, and for Special Transportation Fund appropriations by $8.6 million, $13.3 million, and $18.3 million in FY 20, FY 21, and FY 22, respectively.

Section 272 also implements certain definitional changes to the existing statutory spending cap that have been incorporated into the results of the spending cap calculation outlined in this fiscal note.

Section 273 requires that certain bonds issued prior to July 1, 2020 include a covenant requiring the state to comply with the provisions of section 272 of the amendment.

Sections 274-275 make various conforming changes to implement the above provisions.

Section 276 states that an agreement or award is deemed approved if it is called for consideration in a chamber within 30 days of the filing of the agreement.  If a chamber fails to call the agreement for consideration it is rejected.  The fiscal impact of a rejected contract is indeterminate pending the terms of the new contract.

Section 277 establishes a Teachers' Retirement System Viability Commission and requires either the Office of Policy and Management, within available appropriations, or the Office of Legislative Management to pay for a global consulting firm to assist the Commission in developing a plan to maintain the financial viability of the Teachers' Retirement System.  While the cost of such a consultant is not known, the Teachers' Retirement Board paid its actuarial consultant approximately $100,000 in FY 17. The amendment does not appropriate funds for this purpose.

Section 278, which requires the University of Connecticut Health Center to seek public-private partnerships and report to the legislature on those efforts by April 1, 2018, results in no fiscal impact.  The Health Center has sufficient staff and expertise to implement this requirement.

Section 279 establishes a working group to study potential statutory changes to the teachers' retirement system and the state employees retirement system. The working group is to submit its findings and recommendations to the appropriation and labor committees by January 1, 2019. There may be a cost of less than $1,000 in FY 18 and FY 19 to reimburse any legislators participating in the working group for mileage expenses, currently at 53.5 cents/mile.

Section 280 requires the Office of Legislative Management to contract with a consultant to develop a sustainability plan for the state. The cost of the consultant would vary based on the scope of the project. The bill does not appropriate any funding for this purpose.

Section 281 may result in a potential cost of up to $50,000 to complete a sensitivity analysis and stress test for the Teachers' Retirement System and the State Employees' Retirement System annually.  In accordance with past practice, the cost could be borne by either the Office of Policy and Management, the Teachers' Retirement Board and the State Employees' Retirement Fund. 

Sec. 282 is anticipated to result in savings to the Department of Correction (DOC) as a result of changes to pretrial detention laws.  The budget contains savings in DOC related to the closure of prison units and a prison facility totaling $14.9 million in FY 18 and $16.4 million in FY 19. The changes are anticipated to reduce the pre-trial population and assist in efforts to close units and a facility.

Sections 283–288 extend youthful offender status to certain offenders age 18-20 and results in a cost to the Judicial Department and a potential cost to the Department of Correction.

Sections 289-290 require the Juvenile Justice Policy and Oversight Committee to report recommendations for the removal of all persons under 18 from the custody of the Department of Correction.  This bill includes an appropriation of $333,792 for FY 18 and 19.d

Sections 291–297 make various changes to statute regarding the Department of Children and Families and is not anticipated to result in a fiscal impact.

Sections 298-304 establish the “Passport to Parks Fund.”  It adds a $6 biennial fee on certain Department of Motor Vehicle (DMV) registrations which will generate revenue of approximately $7.2 million in FY 18 and $12.5 million in FY 19 for the newly established fund.  There is a General Fund revenue loss of approximately $1.2 million in FY 18 and $5.4 million in FY 19 as residents would no longer be charged parking fees at state parks.  Appropriations of approximately $6.1 million in FY 18 and $11.8 million in FY 19 will be used by the Department of Energy and Environmental Protection (DEEP) for the care, maintenance, operation, and improvement of state parks and campgrounds.  In FY 19, the newly established fee will also fund the Council on Environmental Quality (CEQ), Conservation Districts, Soil and Water Councils and Environmental Review Teams (ERT's).    

Section 305-306 expands the Results First Program to additional programs, which could result in future savings or efficiencies.

Sections 307 to 333 result in an annualized cost of up to $276,000 for the Office of Policy and Management to staff the Municipal Accountability Review Board ($200,000 for salaries and $76,000 for fringe benefits). It is anticipated that staff will be needed to review and approve the budgets, bond ordinances, and collective bargaining agreements of the most financially distressed municipalities, and carry out several other duties as required by the bill.

The bill results in a potentially significant savings to some municipalities. For example, it allows the most financially distressed municipalities to request that the Municipal Accountability Review Board approve or disapprove their budgets and bond ordinances. If the Board approved a budget that significantly reduced spending, such municipalities would correspondingly achieve significant savings.

Sections 334 through 505 make the following adjustments to bond authorizations in the biennium:

(Millions)

FY 18 $

FY 19 $

TOTAL $

General Obligation (GO) Bonds

 

 

 

New GO Authorizations

1,615.7

1,429.0

3,044.7

Cancellations of existing GO authorizations

(258.0)

-

(258.0)

Reductions to pre-authorizations

(125.5)

(81.0)

(206.5)

TOTAL CHANGE GO BONDS

1,232.2

1,348.0

2,580.2

       

Special Tax Obligation (STO) Bonds

 

 

 

STO

820.3

824.6

1,645.0

       

Clean Water Fund Revenue (CWF) Revenue Bonds

 

 

CWF

158.2

350.3

508.5

In addition, the bond sections include an extension of the UConn 2000 bond program for three additional years (through FY 27) without changing the overall remaining amount of authorization. The Bioscience Innovation Fund is extended by a year (through FY 24), with a net increase to overall remaining authorization of $4 million. A total of $60 million is authorized for the Crumbling Foundations Assistance Fund, $40 million of which is effective after FY 19 ($10 million per year for FY 18 through FY 23).

To the extent that these authorized funds are allocated by the State Bond Commission and issued by the Treasurer, the is a potential increase in future debt service payments for the General Fund (GO bonds) and Special Transportation Fund (STO bonds).

Sections 506-512 adjust the Education Cost Sharing formula and yield town grants totaling approximately $1.90 billion in FY 18 and $1.95 billion in FY 19.  The formula's changes include: (1) a foundation level of $11,000 in FY 18 and $12,570 in FY 19; (2) additional student weights of 25 percent for English Language Learner students and 25 percent for estimated students in poverty; (3) the property portion of the state aid ratio is weighted at 70 percent and the income portion at 30 percent; (4) a statewide guaranteed wealth level of 1.25; and (5) a minimum state aid ratio of 0 percent, except the Alliance District minimum ratio remains at 10 percent.  Changes to ECS grants are made as follows:

Changes to Education Cost Sharing Grants

Town Full Funding Amount Under New Formula

FY 18 Grant

FY 19 Grant

Higher than FY 17 actual ECS grant (after MORE Commission reduction)

FY 17 actual plus 20% of the grant adjustment

FY 17 actual plus 40% of the grant adjustment

Lower than FY 17 actual, and:

 

 

a. Adjustment is more than $1,100 per pupil

FY 17 actual less 33.3% of the adjustment

FY 17 actual less 66.6% of the adjustment

b. Adjustment is less than or equal to $1,100 per pupil

Full funding amount

Full funding amount

"Grant adjustment" (i.e., adjustment) is the difference between a town's FY 17 actual ECS grant (after MORE Commission reduction) and its full funding amount under the new formula.

Sections 513-514 establish a minimum budget requirement (MBR) for FY 18 and FY 19. This results in a potential savings to municipalities as allowances as made for reductions in education equalization aid “ECS.”

Section 515 establishes a task force to conduct a feasibility study on a state special education predictable cost cooperative, which is anticipated to result in a cost to SDE of $250,000-$500,000. The cost is attributed to hiring a consulting firm to conduct a feasibility study, and the estimate is based on similar studies that have been completed in other states. As the taskforce must report its findings by January 1, 2019, the costs mentioned above could be incurred in FY 18, FY 19, or both but will not be reoccurring. There may be a cost of less than $1,000 to those agencies participating in the task force to reimburse legislators and agency staff for mileage expenses, currently at 53.5 cents/mile.

Section 516 establishes the Connecticut Achievement and Resource Equity in Schools Commission. It is anticipated that there may be a cost of less than $1,000 to those agencies participating in the task force to reimburse legislators and agency staff for mileage expenses, currently at 53.5 cents/mile.

Section 517 increases the state per pupil grant for charter schools from $11,000 to $11,314 in FY 19 and $11,628 in FY 20.  This is anticipated to result in a significant cost to the state. It is anticipated that in FY 18 there will be approximately 9,906 charter students. This results in an additional cost of FY 19 of approximately $3.1 million and an additional $3.1 million in FY 20.

Section 518 makes a technical change that does not result in a fiscal impact.

Sections 519-526 establish and define promise and opportunity districts, including procedural requirements for obtaining ECS grants. The sections make clarifying, procedural and technical changes that are not anticipated to result in an additional cost to the state.

Sections 526-529 cap various state grants within available appropriation. This results in a potential significant savings to the state and corresponding revenue loss to municipalities who otherwise would have eligible to receive state funding.

Sections 530-531 allow for continued payment of magnet schools, Sheff magnet schools, and enrollment caps to stay within budget and extend tuition prohibition.

Sections 532-542 make procedural, technical and clarifying changes to the Technical Education and Career System, are not anticipated to result in a fiscal impact.

Sections 543-546 result in a cost of $100,000 to the Office of Early Childhood (plus fringe of $38,080) in both FY 18 and FY 19 associated with two staff to support comprehensive background checks for child care providers, as reflected in the budget.

Section 547, which removes the requirement that the University of Connecticut construction assurance director be full-time, may result in potential savings to the university in salary and fringe costs, if the position becomes part-time.  The full-time director position's current salary is approximately $124,500 and benefits total $79,600.

Section 548 approves a total of $486.4 million in state grant commitments for school construction projects, including: (1) $485.3 million for 49 new projects on the education commissioner's project priority list and (2) $1.1 million for three previously-authorized projects that have changed substantially (more than 10%) in cost or scope.

These grants-in-aid will be financed through the issuance of up to $451.5 million in General Obligation (GO) bonds, which will be authorized in future fiscal years. No new bonds are authorized in these sections. Debt service is expected to increase in future years to the extent that projects are completed and reimbursements are sought by municipalities.

Sections 549-557 not withstand certain aspects of the underlying school construction projects and reimbursement statutes. Two projects were included or altered in the priority list, with those potential impacts reflected in Section X. Five projects are described with a collective potential cost up to $8.7 million (financed through GO bonds). There is also likely a reduction in potential future costs, as the scope of a project previously approved for reimbursement in New London was narrowed, with the overall project costs expected to decline by up to $17 million.

Section 558-566 make changes to school construction statutory requirements. There is the potential for both savings and increased future costs within these changes. For instance, calculating municipal reimbursement rates based on three-year rolling averages will have specific increased or decreased costs for individual projects and municipalities, but overall state contributions, along with aggregate municipal costs, are expected to be unchanged.  

Sections 567-569 establish programs by which holders of certain stranded tax credits may utilize said credits.  This results in a potentially significant revenue loss in the out years, anticipated to be less than $50 million in the aggregate.

Section 570, which establishes a Higher Education Entrepreneurship Advisory committee within Connecticut Innovations, Inc.'s CTNext, results in no fiscal impact to the state.

Section 571, which establishes a working group to develop a plan to advance the state's position as a microbiome sub-sector leader, results in no fiscal impact to the state. 

Sections 572-575 reduce candidate grants based on when applications are submitted.  While this may result in savings to the Citizens' Election Fund (CEF), it is anticipated that the majority of candidates will file applications earlier to receive the full grant amount, increasing the State Elections Enforcement Commission (SEEC) staff workload.  Overtime costs may be incurred.  Currently, the SEEC receives grant applications over a multi month period.

Section 576 requires the SEEC to issue a decision or dismiss a written complaint within one year of receiving it. Under current law, SEEC has no timeframe in which to complete an investigation.  Under the amendment, investigations must be completed in one year.  SEEC will need to have four additional staff at a cost of approximately $162,755 in FY 18 (partial year) and $404,562 in FY 19 (annualized) to meet the time deadlines.

Section 577 which requires the State Elections Enforcement Commission to conduct an audit after an election or primary through a weighted lottery process has no fiscal impact on the Citizens' Election Fund.

Section 578 adjusts individual and aggregate contribution ranges to reflect Consumer Price Index (CPI) adjustments.  The adjusted contribution ranges are not anticipated to impact the CEF.

Sections 579-582 establish the Connecticut Transportation Finance Authority (CTFA) as a quasi-public agency.  The bill requires the CTFA to annually report the financial health of the Special Transportation Fund (STF) to the General Assembly.   Employees of the CTFA are not state employees and therefore are not eligible for state benefits.  To the extent that existing state employees are moved under the purview of the authority, there may be a personal services and corresponding fringes savings to the General Fund and Special Transportation Fund.

Section 583-587 allows the CTFA to authorize the use of electronic tolling systems along limited access highways.  If the CTFA authorizes the use of electronic tolling, the Department of Transportation is required to build, maintain, and operate electronic tolls, or contract with a private entity.  The bill does not specify how the authority will be funded but to the extent the authority is funded by state resources there may be a cost to the STF.  The bill also requires all revenue to be deposited into the STF and not be commingled with any other revenue. The bill also specifies that the revenue is subject to federal guidelines and can only be used for the purposes outlined under those regulations. The Federal Highway Administration limits how revenue generated by tolls can be used and requires the revenue to be used for debt service with respect to the projects for which the tolls are authorized.

Section 588 authorizes the Treasurer, OPM secretary, and DOT commissioner to enter into loan agreements or other credit agreements with the U.S. Department of Transportation, including agreements under the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) programs. The amendment allows such loan agreements to be backed by STO bonds. The fiscal impact is indeterminate as the amendment does not address what projects would be used for these loan agreements. If tolls are established using one of these agreements, the toll revenue would be used as the dedicated revenue stream. If these agreements are used for other transportation projects then the dedicated revenue stream would be the STF. Therefore, there may be a potential cost to the STF directly, or as STF debt service via STO bonds, to pay back the loan. 

Section 589 establishes the Transportation Excess Surplus Account within the STF and requires the Comptroller to transfer any unappropriated surplus in excess of fifteen percent of total expenditures to the account.   There is no fiscal impact in FY 18 or FY 19 as the surplus does not surpass the amount specified under this section.

Sec. 590-593 does not result in a fiscal impact as it adds the Connecticut Transportation Finance Authority to the list of state quasi-public agencies.

Section 594 does not result in a fiscal impact as it redefines highway tolls to include expressway revenues.

The following table outlines the various sections of the amendment having a revenue impact.

Sec.

Action(s)

Fund

FY 18 $

 FY 19 $

Various

Reflect Net Federal Revenue Impact from State Policy Changes

General

433.7

391.6

129

License Public Water Systems

General

-

2.5

298- 304

Establish Passport to Parks

Passport to Parks Fund

4.8

9.6

595

Authorize DRS "Fresh Start" Initiative

General

60.0

25.0

596-598

Exempt Social Security from State Income Tax

General

-

-

Maintain Teachers' Retirement Pension Exemption at 25%

General

8.0

8.0

Establish Deduction for Expenses Related to Organ Donation

General

-

-

599

Modify the $200 Property Tax Credit

General

80.2

80.2

600

Establish Tax Credit for STEM Graduates

General

-

-

601-603

Eliminate sales tax transfer to MRSA

General

327.8

335.4

Reduce or Eliminate Transfer to the Regional Performance Incentive Account

General

10.0

10.0

Increase Hotel Tax to Support Marketing, Culture & Tourism, Fund established

Tourism

9.9

15.2

604

Exempt Sales of Services between certain Parents/Subsidiaries

General

-

-

605

Eliminate the Sales Tax Exemption for Non-Prescription Drugs

General

12.9

17.2

606

Maintain the Neighborhood Assistance Act Tax Credit Cap @ $5M

General

5.0

5.0

607

Retain Funds Designated for the Municipal Video Competition Trust Account

General

2.0

2.0

608

Retain PEGPETIA Surtax Revenue

General

3.5

3.5

609-613

Lower lifetime cap on Gift & Estate Tax

General

-

-

Phase-in federal exemption levels for Estate Tax

General

-

-

614-618

Make Permanent the 3-Tier Credit Cap on Insurance Premiums Tax

General

17.4

16.0

Make Permanent the Moratorium on the Earning of Film Production Tax Credits

General

4.0

4.0

Lower the Rate of the Insurance Premiums Tax

General

(11.0)

(22.4)

Enable Use of Film Production Tax Credits by Affiliates at a Discount

General

1.4

3.3

619-622

Impose Floor Tax on Tobacco changes

General

5.0

-

Increase Cigarette Tax

General

29.9

42.4

Increase Tax Rate on Snuff

General

7.4

11.1

623

Re-examine Tax Expenditures

General

-

50.0

624

Establish Vehicle License Cost Recovery Fee in lieu of Rental Car Surcharge

General

0.5

1.1

625

Establish Cell Phone Surcharge

General

8.9

17.7

626

Modify the Earned Income Tax Credit

General

25.0

26.0

627

Require Reductions to the CT Lottery Corporation Expenses

General

0.8

1.0

628

Casino Application & Licensing Fee

General

30.0

-

629

Reallocate support for newborn screening program to GF

General

3.1

3.1

630

Increase Filing Fee for Land Recording

General

2.1

3.0

631

Increase Fees for Criminal History Record Checks

General

1.7

2.6

632

Eliminate the Green Building Tax Credit Program

General

0.7

0.7

633

Impose a 25 cent fee on Ridesharing Services

General

3.0

5.0

634-635

Divert Settlement Revenues for Indigent Legal Counsel (Civil Gideon)

General

(0.4)

(0.4)

636

Shift Normal Cost for Teachers' Retirement to Municipalities

(SEE NOTE BELOW)

General

91.9

189.7

(SEE NOTE BELOW)

637

Modify Seat Belt Account

General

2.0

-

638, 695

Transfer from Green Bank

General

10.0

-

639

Transfer from Banking Fund

General

11.2

9.2

Transfer from Banking Fund

Banking

(11.2)

(9.2)

640

Transfer from the Emissions Enterprise Fund

General

1.5

1.5

641-686

Reflect Inflation - Licenses, Fees and Permits DMV

General

20.0

49.0

687-688

Reduce Transfer to the Tobacco Health Trust Fund

General

6.0

6.0

Adjust the Diversion of Tobacco Funds to the Smart Start Account

General

10.0

10.0

689

Transfer to MRSF from the General Fund

General

(415.8)

(368.0)

689

Transfer to MRSF from the General Fund

Muncipal Revenue Sharing Fund

415.8

368.0

690

Set Aside Petroleum Gross Earnings Taxes on Aviation Fuel for Airports

Special Transportation Fund

(7.0)

(7.8)

691

Credit FY 18 Revenue to FY 19

Special Transportation Fund

(4.5)

4.5

696

Increase Annual Filing Fee with the Secretary of the State

General

4.0

5.1

695

Increase Clean Energy Fund Charge by 1 mill

General

8.6

13.0

697

Transfer from the Judicial Department Technology Fund

General

5.0

-

698

Establish a Fee for Auto Trade-Ins Payable by the Dealer

General

3.5

3.5

699-701

Increase Broker Fees by $25 / Divert Revenue Gain to General Fund (2018-2019 Biennium)

Banking

5.2

5.2

722-724

Establish a State Property Tax on Seasonal and Recreational Homes

General

32.0

32.0

725

Sweep Maintenance, Repair and Improvement Account

General

1.7

-

726-742

Modify Ambulatory Surgical Centers Tax

General

(1.0)

(1.0)

Modify Hospital Tax

General

343.9

343.9

n/a

Delay GAAP Authorization

General

57.5

57.5

n/a

Recognize PURA Settlement

General

5.0

-

n/a

Eliminate Transfer to Pequot and Mohegan Fund

General

57.1

57.1

n/a

Enhance Collections by DRS

General

30.0

30.0

Section 636 requires each municipality to reimburse the state for 50% of its portion of the normal cost of the teachers' retirement system. This results in revenue to the state and a corresponding cost to municipalities of $91.9 million in FY 18 and $94.9 million in FY 19. It should be noted that the revenue schedule adopted by FRB assumed a reimbursement of 100% of the municipal portion of the normal cost in FY 19.

Sections 743- 745: (1) requires the Department of Social Services (DSS) to establish one or more hospital supplemental payment pool(s) from which payments will be distributed in accordance with a methodology determined by DSS in consultation with the Connecticut Hospital Association, (2) requires the total amount of the supplemental payments made to hospitals to reflect the total amount included in the state budget, (3) in general, requires the supplemental payments to be made on a quarterly basis on or before the last day of the quarter, (4) allows the Commissioner of DSS discretion to provide a distressed hospital, as defined by the amendment, an advance on the entity's FY 18 supplemental payment in accordance with conditions set forth by the Commissioner, and (5) prohibits the Governor from reducing any allotment for the Hospital Supplemental Payment account in FY 18 and FY 19.  The budget assumes $598.4 million in FY 18 and $496.3 million in FY 19 in the Hospital Supplemental Payment account.  Lastly, section 743 eliminates reference to blended inpatient hospital rates which does not result in a fiscal impact in accordance with current practice. 

Section 746 distributes $364 million in funding to municipalities in FY 18, as part of the Municipal Assistance Grant.

Section 747 (1) repeals section 8 of PA 17-144 which results in a minimal fiscal impact to the Office of Legislative Management and (2) repeals section 481 of public act 15-5 JSS, section 9 of public act 15-1 DSS and section 8 of public act 16-146 which does not result in a fiscal impact.

Section 748 and 750 make technical and conforming changes that have no fiscal impact.

Section 749 repeals section 62 of PA17-202 which made DORS the successor agency to the Office of Protection and Advocacy with respect to the investigation of abuse and neglect due to the transfer to DDS.

The Out Years

With the exception of the one-time policies noted above, the annualized ongoing fiscal impacts identified above would continue into the future subject to inflation.

The table below compares the revenue estimates to the projected expenditures for FY 20 – FY 22 based on the FY 18 and FY 19 budget.

FY 20 – FY 22 Fund Balance (in millions)

Fund

FY 20 $

FY 21 $

FY 22 $

Approp

Revenue

Surplus/

(Deficit)

Approp

Revenue

Surplus/

(Deficit)

Approp

Revenue

Surplus/

(Deficit)

General

19,488.4

18,036.0

(1,452.4)

20,381.6

18,256.9

(2,124.8)

21,053.8

18,453.3

(2,600.4)

Transportation

1,715.9

1,724.1

8.2

1,815.9

1,774.1

(41.8)

1,932.2

1,825.6

(106.6)

Municipal Revenue Sharing Fund

47.4

48.0

0.6

47.4

48.0

0.6

47.4

48.0

0.6

Other Appropriated

201.8

202.3

0.5

201.8

202.3

0.5

201.8

202.3

0.5

TOTAL

21,453.5

20,010.4

(1,443.1)

22,446.7

20,281.2

(2,165.4)

23,235.1

20,529.2

(2,705.9)

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 Based on the FY 15 estimated expenditure level contained in the Governor's FY 16 – FY 17 Budget document.