OLR Bill Analysis
sHB 5171 (as amended by House "A")*
AN ACT PROHIBITING THE EXECUTIVE BRANCH FROM MAKING RESCISSIONS OR OTHER REDUCTIONS TO THE EDUCATION COST SHARING GRANT DURING THE FISCAL YEAR.
This bill, overriding any general statute or special act, prohibits the governor from cutting education cost sharing (ECS) aid grants to towns by (1) using his rescission authority to reduce allotment requisitions or allotments in force or (2) making reductions in allotments in any budgeted agency to achieve General Fund budget savings. An allotment requisition is a state agency's formal quarterly request to the Office of Policy and Management (OPM) for the amount it needs to carry out an appropriation's purpose. An allotment in force is an allotment that OPM has granted. Existing law already exempts municipal aid from rescissions.
The bill also revises provisions in the budget act (PA 17-2, June Special Session) to exempt ECS aid grants from authorized reductions to achieve General Fund budget savings for FYs 18 and 19 (i.e., unallocated budgeted lapses and targeted budget savings). Presumably, this applies to reductions made after the bill's passage for FYs 18 and 19.
The bill also exempts ECS grants from being used by OPM as one of the municipal assistance programs that the OPM secretary can withhold assistance from in order to recover part of the costs it incurs in the Renters' Rebate Program (see BACKGROUND).
*House Amendment “A” adds the provisions exempting ECS aid grants from authorized reductions under the budget act and assistance withholdings related to the Renters' Rebate Program.
EFFECTIVE DATE: July 1, 2018, except the provisions exempting ECS aid grants from authorized reductions under the budget act are effective upon passage.
Governor's Authority to Reduce Allotment Requisitions or Allotments in Force
By law, the governor can reduce an allotment requisition or allotment in force if he (1) determines circumstances have changed after the budget's adoption or (2) estimates that budgeted resources will be insufficient to fully fund all appropriations. He may also do so if the comptroller's cumulative monthly financial statement shows a General Fund deficit of more than 1% of total General Fund appropriations. These reductions are called rescissions.
The law limits the amount by which the governor can reduce allotments and restricts him from reducing certain grants and line items. He may reduce allotments within specified limits—up to 5% of an individual appropriation account within an agency or 3% of total appropriations in a fund – but must seek the legislature's approval for reductions that exceed these limits (there are exceptions for extreme emergencies). The governor is also restricted from cutting (1) municipal aid, (2) certain ”watchdog” agency line items (e.g., the Office of State Ethics), or (3) legislative and judicial branch line items. He may, however, require an aggregate allotment reduction for the legislative and judicial branches (CGS § 4-85(e)).
Renters' Rebate Program
The state's Renters' Rebate Program provides rebates to older adult or totally disabled renters whose incomes do not exceed certain limits.
By law, the state issues the rebates to renters, prorating them as necessary to stay within available appropriations. But OPM must recover from municipalities 50% of the cost of issuing rebates to the municipality's residents through grant withholdings or reductions. Beginning in FY 18 and annually thereafter, OPM must select at least one state grant per municipality from which to withhold up to $250,000 per year. The amount of money withheld or reduced must be based on rebates for the most recent application period. The secretary must transfer the amount withheld or reduced to OPM for making renters' rebate payments (CGS § 12-170f).