Connecticut Seal

General Assembly

File No. 394

    February Session, 2018

Senate Bill No. 423

Senate, April 10, 2018

The Committee on Planning and Development reported through SEN. CASSANO, S. of the 4th Dist. and SEN. LOGAN of the 17th Dist., Chairpersons of the Committee on the part of the Senate, that the bill ought to pass.

AN ACT ELIMINATING THE MUNICIPAL SPENDING CAP.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 4-66l of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2018):

(a) For the purposes of this section:

(1) "FY 15 mill rate" means the mill rate a municipality used during the fiscal year ending June 30, 2015;

(2) "Mill rate" means, unless otherwise specified, the mill rate a municipality uses to calculate tax bills for motor vehicles;

(3) "Municipality" means any town, city, consolidated town and city or consolidated town and borough. "Municipality" includes a district for the purposes of subdivision (1) of subsection (d) of this section;

(4) "Municipal spending" means:

T1

Municipal

spending for

the fiscal year

prior to the

current fiscal

year

Municipal

spending for

the fiscal year

two years

prior to the

current year

   

T2

   

T3

   

T4

   

T5

   

T6

   

T7

_________________________________

X 100

= Municipal spending;

T8

Municipal spending for the fiscal

T9

year two years prior to the current

   

T10

year

   

(5) "Per capita distribution" means:

T11

Municipal population

___________________

X Sales tax revenue

= Per capita distribution;

T12

T13

Total state population

(6) "Pro rata distribution" means:

T14

Municipal weighted

mill rate calculation

X Sales tax revenue

= Pro rata distribution;

T15

T16

___________________

T17

Sum of all municipal

weighted mill rate

calculations combined

T18

T19

(7) "Regional council of governments" means any such council organized under the provisions of sections 4-124i to 4-124p, inclusive;

(8) "Municipal population" means the number of persons in a municipality according to the most recent estimate of the Department of Public Health;

(9) "Total state population" means the number of persons in this state according to the most recent estimate published by the Department of Public Health;

(10) "Weighted mill rate" means a municipality's FY 15 mill rate divided by the average of all municipalities' FY 15 mill rate;

(11) "Weighted mill rate calculation" means per capita distribution multiplied by a municipality's weighted mill rate;

(12) "Sales tax revenue" means the moneys in the account remaining for distribution pursuant to subdivision (7) of subsection (b) of this section;

(13) "District" means any district, as defined in section 7-324; and

(14) "Secretary" means the Secretary of the Office of Policy and Management.

(b) There is established an account to be known as the "municipal revenue sharing account" which shall be a separate, nonlapsing account within the General Fund. The account shall contain any moneys required by law to be deposited in the account. The secretary shall set aside and ensure availability of moneys in the account in the following order of priority and shall transfer or disburse such moneys as follows:

(1) Ten million dollars for the fiscal year ending June 30, 2016, shall be transferred not later than April fifteenth for the purposes of grants under section 10-262h;

(2) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, moneys sufficient to make motor vehicle property tax grants payable to municipalities pursuant to subsection (c) of this section shall be expended not later than August first annually by the secretary;

(3) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, moneys sufficient to make the grants payable from the select payment in lieu of taxes grant account established pursuant to section 12-18c shall annually be transferred to the select payment in lieu of taxes account in the Office of Policy and Management;

(4) For the fiscal years ending June 30, 2018, and June 30, 2019, moneys sufficient to make the municipal revenue sharing grants payable to municipalities pursuant to subdivision (2) of subsection (d) of this section shall be expended not later than October thirty-first annually by the secretary;

(5) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, seven million dollars shall be expended for the purposes of the regional services grants pursuant to subsection (e) of this section to the regional councils of governments;

(6) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, moneys may be expended for the purpose of supplemental motor vehicle property tax grants pursuant to subsection (c) of this section; and

(7) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, moneys in the account remaining shall be expended annually by the secretary for the purposes of the municipal revenue sharing grants established pursuant to subsection (f) of this section. Any such moneys deposited in the account for municipal revenue sharing grants between October first and June thirtieth shall be distributed to municipalities on the following October first and any such moneys deposited in the account between July first and September thirtieth shall be distributed to municipalities on the following January thirty-first. Any municipality may apply to the Office of Policy and Management on or after July first for early disbursement of a portion of such grant. The Office of Policy and Management may approve such an application if it finds that early disbursement is required in order for a municipality to meet its cash flow needs. No early disbursement approved by said office may be issued later than September thirtieth.

(c) (1) For the fiscal year ending June 30, 2018, motor vehicle property tax grants to municipalities that impose mill rates on real property and personal property other than motor vehicles greater than 39 mills or that, when combined with the mill rate of any district located within the municipality, impose mill rates greater than 39 mills, shall be made in an amount equal to the difference between the amount of property taxes levied by the municipality and any district located within the municipality on motor vehicles for the assessment year commencing October 1, 2013, and the amount such levy would have been if the mill rate on motor vehicles for said assessment year was 39 mills.

(2) For the fiscal year ending June 30, 2019, and each fiscal year thereafter, motor vehicle property tax grants to municipalities that impose mill rates on real property and personal property other than motor vehicles greater than 45 mills or that, when combined with the mill rate of any district located within the municipality, impose mill rates greater than 45 mills, shall be made in an amount equal to the difference between the amount of property taxes levied by the municipality and any district located within the municipality on motor vehicles for the assessment year commencing October 1, 2013, and the amount such levy would have been if the mill rate on motor vehicles for said assessment year was 45 mills.

(3) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, any municipality that imposed a mill rate for real and personal property of more than 39 mills during the fiscal year ending June 30, 2017, and effected a revaluation of real property for the 2014 or 2015 assessment year that resulted in an increase of 4 or more mills over the prior mill rate, may apply to the Office of Policy and Management for a supplemental motor vehicle property tax grant. The Office of Policy and Management may approve such an application, within available funds, provided such supplemental grant does not reduce any amount payable to any other municipality.

(4) Not later than fifteen calendar days after receiving a property tax grant pursuant to this section, the municipality shall disburse to any district located within the municipality the amount of any such property tax grant that is attributable to the district.

(d) (1) For the fiscal year ending June 30, 2017, each municipality shall receive a municipal revenue sharing grant, which shall be payable August 1, 2016, from the Municipal Revenue Sharing Fund established in section 4-66p. The total amount of the grant payable is as follows:

T20

Municipality

Grant Amount

T21

Andover

66,705

T22

Ansonia

605,442

T23

Ashford

87,248

T24

Avon

374,711

T25

Barkhamsted

76,324

T26

Beacon Falls

123,341

T27

Berlin

843,048

T28

Bethany

114,329

T29

Bethel

392,605

T30

Bethlehem

42,762

T31

Bloomfield

438,458

T32

Bolton

106,449

T33

Bozrah

53,783

T34

Branford

570,402

T35

Bridgeport

14,476,283

T36

Bridgewater

15,670

T37

Bristol

1,276,119

T38

Brookfield

343,611

T39

Brooklyn

103,910

T40

Burlington

193,490

T41

Canaan

14,793

T42

Canterbury

58,684

T43

Canton

211,078

T44

Chaplin

48,563

T45

Cheshire

594,084

T46

Chester

57,736

T47

Clinton

268,611

T48

Colchester

330,363

T49

Colebrook

29,694

T50

Columbia

111,276

T51

Cornwall

11,269

T52

Coventry

252,939

T53

Cromwell

288,951

T54

Danbury

2,079,675

T55

Darien

171,485

T56

Deep River

93,525

T57

Derby

462,718

T58

Durham

150,019

T59

East Granby

106,222

T60

East Haddam

186,418

T61

East Hampton

263,149

T62

East Hartford

3,877,281

T63

East Haven

593,493

T64

East Lyme

243,736

T65

East Windsor

232,457

T66

Eastford

23,060

T67

Easton

155,216

T68

Ellington

321,722

T69

Enfield

911,974

T70

Essex

74,572

T71

Fairfield

795,318

T72

Farmington

335,287

T73

Franklin

26,309

T74

Glastonbury

754,546

T75

Goshen

30,286

T76

Granby

244,839

T77

Greenwich

366,588

T78

Griswold

243,727

T79

Groton

433,177

T80

Guilford

456,863

T81

Haddam

170,440

T82

Hamden

4,491,337

T83

Hampton

38,070

T84

Hartford

13,908,437

T85

Hartland

27,964

T86

Harwinton

113,987

T87

Hebron

208,666

T88

Kent

26,808

T89

Killingly

351,213

T90

Killingworth

85,270

T91

Lebanon

149,163

T92

Ledyard

307,619

T93

Lisbon

45,413

T94

Litchfield

169,828

T95

Lyme

21,862

T96

Madison

372,897

T97

Manchester

1,972,491

T98

Mansfield

525,280

T99

Marlborough

131,065

T100

Meriden

1,315,347

T101

Middlebury

154,299

T102

Middlefield

91,372

T103

Middletown

964,657

T104

Milford

1,880,830

T105

Monroe

404,221

T106

Montville

401,756

T107

Morris

28,110

T108

Naugatuck

2,405,660

T109

New Britain

5,781,991

T110

New Canaan

168,106

T111

New Fairfield

288,278

T112

New Hartford

140,338

T113

New Haven

2,118,290

T114

New London

750,249

T115

New Milford

565,898

T116

Newington

651,000

T117

Newtown

572,949

T118

Norfolk

20,141

T119

North Branford

292,517

T120

North Canaan

66,052

T121

North Haven

487,882

T122

North Stonington

107,832

T123

Norwalk

3,401,590

T124

Norwich

1,309,943

T125

Old Lyme

79,946

T126

Old Saybrook

101,527

T127

Orange

284,365

T128

Oxford

171,492

T129

Plainfield

310,350

T130

Plainville

363,176

T131

Plymouth

255,581

T132

Pomfret

54,257

T133

Portland

192,715

T134

Preston

58,934

T135

Prospect

197,097

T136

Putnam

76,399

T137

Redding

189,781

T138

Ridgefield

512,848

T139

Rocky Hill

405,872

T140

Roxbury

15,998

T141

Salem

85,617

T142

Salisbury

20,769

T143

Scotland

36,200

T144

Seymour

343,388

T145

Sharon

19,467

T146

Shelton

706,038

T147

Sherman

39,000

T148

Simsbury

567,460

T149

Somers

141,697

T150

South Windsor

558,715

T151

Southbury

404,731

T152

Southington

889,821

T153

Sprague

89,456

T154

Stafford

243,095

T155

Stamford

2,372,358

T156

Sterling

77,037

T157

Stonington

202,888

T158

Stratford

1,130,316

T159

Suffield

321,763

T160

Thomaston

158,888

T161

Thompson

114,582

T162

Tolland

303,971

T163

Torrington

2,435,109

T164

Trumbull

745,325

T165

Union

17,283

T166

Vernon

641,027

T167

Voluntown

33,914

T168

Wallingford

919,984

T169

Warren

11,006

T170

Washington

25,496

T171

Waterbury

13,438,542

T172

Waterford

259,091

T173

Watertown

453,012

T174

West Hartford

1,614,320

T175

West Haven

1,121,850

T176

Westbrook

80,601

T177

Weston

211,384

T178

Westport

262,402

T179

Wethersfield

940,267

T180

Willington

121,568

T181

Wilton

380,234

T182

Winchester

224,447

T183

Windham

513,847

T184

Windsor

593,921

T185

Windsor Locks

256,241

T186

Wolcott

340,859

T187

Woodbridge

247,758

T188

Woodbury

200,175

T189

Woodstock

97,708

T190

Borough of Danielson

-

T191

Borough of Litchfield

-

T192

Bloomfield, Blue Hills FD

92,961

T193

Enfield Thompsonville FD #2

354,311

T194

Manchester - Eighth Utility District

436,718

T195

Middletown - City Fire

910,442

T196

Middletown So Fire

413,961

T197

Norwich CCD

552,565

T198

Norwich TCD

62,849

T199

Simsbury FD

221,536

T200

Plainfield Fire District

-

T201

Windham, Special Service District #2

640,000

T202

Windham 1st Taxing District

-

T203

Windham First

 

T204

West Haven First Center (D1)

1,039,843

T205

West Haven: Allingtown FD (D3)

483,505

T206

West Haven: West Shore FD (D2)

654,640

(2) For the fiscal years ending June 30, 2018, and June 30, 2019, each municipality shall receive a municipal sharing grant payable not later than October thirty-first of each year. The total amount of the grant payable is as follows:

T207

Municipality

Grant Amount

T208

Andover

96,020

T209

Ansonia

643,519

T210

Ashford

125,591

T211

Avon

539,387

T212

Barkhamsted

109,867

T213

Beacon Falls

177,547

T214

Berlin

1,213,548

T215

Bethany

164,574

T216

Bethel

565,146

T217

Bethlehem

61,554

T218

Bloomfield

631,150

T219

Bolton

153,231

T220

Bozrah

77,420

T221

Branford

821,080

T222

Bridgeport

9,758,441

T223

Bridgewater

22,557

T224

Bristol

1,836,944

T225

Brookfield

494,620

T226

Brooklyn

149,576

T227

Burlington

278,524

T228

Canaan

21,294

T229

Canterbury

84,475

T230

Canton

303,842

T231

Chaplin

69,906

T232

Cheshire

855,170

T233

Chester

83,109

T234

Clinton

386,660

T235

Colchester

475,551

T236

Colebrook

42,744

T237

Columbia

160,179

T238

Cornwall

16,221

T239

Coventry

364,100

T240

Cromwell

415,938

T241

Danbury

2,993,644

T242

Darien

246,849

T243

Deep River

134,627

T244

Derby

400,912

T245

Durham

215,949

T246

East Granby

152,904

T247

East Haddam

268,344

T248

East Hampton

378,798

T249

East Hartford

2,036,894

T250

East Haven

854,319

T251

East Lyme

350,852

T252

East Windsor

334,616

T253

Eastford

33,194

T254

Easton

223,430

T255

Ellington

463,112

T256

Enfield

1,312,766

T257

Essex

107,345

T258

Fairfield

1,144,842

T259

Farmington

482,637

T260

Franklin

37,871

T261

Glastonbury

1,086,151

T262

Goshen

43,596

T263

Granby

352,440

T264

Greenwich

527,695

T265

Griswold

350,840

T266

Groton

623,548

T267

Guilford

657,644

T268

Haddam

245,344

T269

Hamden

2,155,661

T270

Hampton

54,801

T271

Hartford

1,498,643

T272

Hartland

40,254

T273

Harwinton

164,081

T274

Hebron

300,369

T275

Kent

38,590

T276

Killingly

505,562

T277

Killingworth

122,744

T278

Lebanon

214,717

T279

Ledyard

442,811

T280

Lisbon

65,371

T281

Litchfield

244,464

T282

Lyme

31,470

T283

Madison

536,777

T284

Manchester

1,971,540

T285

Mansfield

756,128

T286

Marlborough

188,665

T287

Meriden

1,893,412

T288

Middlebury

222,109

T289

Middlefield

131,529

T290

Middletown

1,388,602

T291

Milford

2,707,412

T292

Monroe

581,867

T293

Montville

578,318

T294

Morris

40,463

T295

Naugatuck

1,251,980

T296

New Britain

3,131,893

T297

New Canaan

241,985

T298

New Fairfield

414,970

T299

New Hartford

202,014

T300

New Haven

114,863

T301

New London

917,228

T302

New Milford

814,597

T303

Newington

937,100

T304

Newtown

824,747

T305

Norfolk

28,993

T306

North Branford

421,072

T307

North Canaan

95,081

T308

North Haven

702,295

T309

North Stonington

155,222

T310

Norwalk

4,896,511

T311

Norwich

1,362,971

T312

Old Lyme

115,080

T313

Old Saybrook

146,146

T314

Orange

409,337

T315

Oxford

246,859

T316

Plainfield

446,742

T317

Plainville

522,783

T318

Plymouth

367,902

T319

Pomfret

78,101

T320

Portland

277,409

T321

Preston

84,835

T322

Prospect

283,717

T323

Putnam

109,975

T324

Redding

273,185

T325

Ridgefield

738,233

T326

Rocky Hill

584,244

T327

Roxbury

23,029

T328

Salem

123,244

T329

Salisbury

29,897

T330

Scotland

52,109

T331

Seymour

494,298

T332

Sharon

28,022

T333

Shelton

1,016,326

T334

Sherman

56,139

T335

Simsbury

775,368

T336

Somers

203,969

T337

South Windsor

804,258

T338

Southbury

582,601

T339

Southington

1,280,877

T340

Sprague

128,769

T341

Stafford

349,930

T342

Stamford

3,414,955

T343

Sterling

110,893

T344

Stonington

292,053

T345

Stratford

1,627,064

T346

Suffield

463,170

T347

Thomaston

228,716

T348

Thompson

164,939

T349

Tolland

437,559

T350

Torrington

1,133,394

T351

Trumbull

1,072,878

T352

Union

24,878

T353

Vernon

922,743

T354

Voluntown

48,818

T355

Wallingford

1,324,296

T356

Warren

15,842

T357

Washington

36,701

T358

Waterbury

5,595,448

T359

Waterford

372,956

T360

Watertown

652,100

T361

West Hartford

2,075,223

T362

West Haven

1,614,877

T363

Westbrook

116,023

T364

Weston

304,282

T365

Westport

377,722

T366

Wethersfield

1,353,493

T367

Willington

174,995

T368

Wilton

547,338

T369

Winchester

323,087

T370

Windham

739,671

T371

Windsor

854,935

T372

Windsor Locks

368,853

T373

Wolcott

490,659

T374

Woodbridge

274,418

T375

Woodbury

288,147

T376

Woodstock

140,648

(e) For the fiscal year ending June 30, 2017, and each fiscal year thereafter, each regional council of governments shall receive a regional services grant, the amount of which will be based on a formula to be determined by the secretary, except that, for the fiscal year ending June 30, 2018, and each fiscal year thereafter, thirty-five per cent of such grant moneys shall be awarded to regional councils of governments for the purpose of assisting regional education service centers in merging their human resource, finance or technology services with such services provided by municipalities within the region. For the fiscal year ending June 30, 2017, three million dollars shall be expended by the secretary from the Municipal Revenue Sharing Fund established in section 4-66p for the purpose of the regional services grant. No such council shall receive a grant for the fiscal year ending June 30, 2018, or any fiscal year thereafter, unless the secretary approves a spending plan for such grant moneys submitted by such council to the secretary on or before July 1, 2017, and annually thereafter. The regional councils of governments shall use such grants for planning purposes and to achieve efficiencies in the delivery of municipal services by regionalizing such services, including, but not limited to, region-wide consolidation of such services. Such efficiencies shall not diminish the quality of such services. A unanimous vote of the representatives of such council shall be required for approval of any expenditure from such grant. On or before October 1, 2017, and biennially thereafter, each such council shall submit a report, in accordance with section 11-4a, to the joint standing committees of the General Assembly having cognizance of matters relating to planning and development and finance, revenue and bonding. Such report shall summarize the expenditure of such grants and provide recommendations concerning the expansion, reduction or modification of such grants.

(f) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, each municipality shall receive a municipal revenue sharing grant as follows:

(1) (A) A municipality having a mill rate at or above twenty-five shall receive the per capita distribution or pro rata distribution, whichever is higher for such municipality.

(B) Such grants shall be increased by a percentage calculated as follows:

T377

 

Sum of per capita distribution amount

 

T378

 

for all municipalities having a mill rate

 

T379

 

below twenty-five – pro rata distribution

 

T380

 

amount for all municipalities

 

T381

 

having a mill rate below twenty-five

 

T382

 

_______________________________________

 

T383

 

Sum of all grants to municipalities

 

T384

 

calculated pursuant to subparagraph (A)

 

T385

 

of subdivision (1) of this subsection.

 

(C) Notwithstanding the provisions of subparagraphs (A) and (B) of this subdivision, Hartford shall receive not more than 5.2 per cent of the municipal revenue sharing grants distributed pursuant to this subsection; Bridgeport shall receive not more than 4.5 per cent of the municipal revenue sharing grants distributed pursuant to this subsection; New Haven shall receive not more than 2.0 per cent of the municipal revenue sharing grants distributed pursuant to this subsection and Stamford shall receive not more than 2.8 per cent of the equalization grants distributed pursuant to this subsection. Any excess funds remaining after such reductions in payments to Hartford, Bridgeport, New Haven and Stamford shall be distributed to all other municipalities having a mill rate at or above twenty-five on a pro rata basis according to the payment they receive pursuant to this subdivision; and

(2) A municipality having a mill rate below twenty-five shall receive the per capita distribution or pro rata distribution, whichever is less for such municipality.

(3) For the purposes of this subsection, "mill rate" means the mill rate for real property and personal property other than motor vehicles.

(g) Except as provided in subsection (c) of this section, a municipality may disburse any municipal revenue sharing grant funds to a district within such municipality.

[(h) (1) Except as provided in subdivision (2) of this subsection, for the fiscal year ending June 30, 2018, and each fiscal year thereafter, the amount of the grant payable to a municipality in any year in accordance with subsection (d) or (f) of this section shall be reduced if such municipality increases its adopted budget expenditures for such fiscal year above a cap equal to the amount of adopted budget expenditures authorized for the previous fiscal year by 2.5 per cent or more or the rate of inflation, whichever is greater. Such reduction shall be in an amount equal to fifty cents for every dollar expended over the cap set forth in this subsection. For the purposes of this section, (A) "municipal spending" does not include expenditures for debt service, special education, implementation of court orders or arbitration awards, expenditures associated with a major disaster or emergency declaration by the President of the United States, a disaster emergency declaration issued by the Governor pursuant to chapter 517 or any disbursement made to a district pursuant to subsection (c) or (g) of this section, budgeting for an audited deficit, nonrecurring grants, capital expenditures or payments on unfunded pension liabilities, (B) "adopted budget expenditures" includes expenditures from a municipality's general fund and expenditures from any nonbudgeted funds, and (C) "capital expenditure" means a nonrecurring capital expenditure of one hundred thousand dollars or more. Each municipality shall annually certify to the secretary, on a form prescribed by said secretary, whether such municipality has exceeded the cap set forth in this subsection and if so the amount by which the cap was exceeded.

(2) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, the amount of the grant payable to a municipality in any year in accordance with subsection (d) or (f) of this section shall not be reduced in the case of a municipality whose adopted budget expenditures exceed the cap set forth in subdivision (1) of this subsection by an amount proportionate to any increase to its municipal population from the previous fiscal year, as determined by the secretary.]

[(i)] (h) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, the amount of the grant payable to a municipality in any year in accordance with subsection (f) of this section shall be reduced proportionately in the event that the total of such grants in such year exceeds the amount available for such grants in the municipal revenue sharing account established pursuant to subsection (b) of this section.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2018

4-66l

PD

Joint Favorable

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do 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.


OFA Fiscal Note

State Impact: None

Municipal Impact: See Below

Explanation

The bill eliminates a municipal spending cap, which was imposed during the creation of the Municipal Revenue Sharing Account in PA 15-244, the FY 16 and FY 17 budget.

The bill precludes any decrease in municipal spending that would have occurred as a result of the spending cap.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

OLR Bill Analysis

SB 423

AN ACT ELIMINATING THE MUNICIPAL SPENDING CAP.

SUMMARY

This bill eliminates the municipal spending cap, which is a feature of the municipal revenue sharing grant program. Under current law, beginning in FY 18, the Office of Policy and Management must reduce revenue sharing grants to municipalities whose spending, with certain exceptions, exceeds the specified municipal spending cap (see below).

Under the biennial budget for FYs 18 and 19, only five municipalities will receive revenue sharing grants (Bridgeport, Hartford, Mansfield, New Haven, and Waterbury) (PA 17-2, June Special Session, 590). In effect, the bill only impacts them because they are the only municipalities that risk losing revenue sharing grants if they do not stay under the spending cap.

EFFECTIVE DATE: July 1, 2018

MUNICIPAL SPENDING CAP

Under current law, the spending cap is the greater of the inflation rate or 2.5% or more of the prior fiscal year's authorized general budget expenditures.

Municipalities that increase their adopted budget expenditures over the previous fiscal year by an amount over this cap receive a reduced revenue sharing grant. The reduction is equal to 50 cents for every dollar the municipality spends over the cap.

Certain expenditures do not count toward the cap, including those (1) that exceed the cap by an amount proportionate to the municipality's population increase and (2) for costs associated with debt service, special education, or implementing court orders or arbitration awards.

COMMITTEE ACTION

Planning and Development Committee

Joint Favorable

Yea

13

Nay

9

(03/26/2018)

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