OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

sSB-494

AN ACT REQUIRING STATE CONTRACTORS AND UNIONS TO ADOPT A SEXUAL HARASSMENT POLICY.


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 19 $

FY 20 $

Human Rights & Opportunities, Com.

GF - Cost

50,095

66,793

Comptroller Misc. Accounts (Fringe Benefits)1

GF - Cost

18,199

24,266

Various State Agencies

Various - Potential Cost

See Below

See Below

Higher Education Constituent Units

Various - Potential Revenue Loss

See Below

See Below

Note: GF=General Fund; Various=Various

Municipal Impact: None

Explanation

The bill requires certain state contractors and unions to adopt a sexual harassment policy in order to be eligible to apply for construction contractor prequalification or to respond to a state agency solicitation for competitive bids or requests for proposals.

The bill results in a potential cost to state agencies, including the higher education constituent units. The cost is potential as it is unclear to what extent constituent unit contract respondents will adjust their company policies to Connecticut law. It is anticipated that Connecticut companies will choose to comply with the new requirements while it is unclear if out-of-state and foreign companies will comply.

To the extent that the bill's requirements result in fewer bidders and thus less competitive downward pressure on prices, contractor prices and therefore state agency costs may increase. The amount of potential cost depends on the share of potential respondents that decline to adopt the bill's requirements and the volume of purchases that require competitive bidding or proposals. For context, FY 17 University of Connecticut (UConn) and UConn Health Center purchasing from out-of-state and foreign companies totaled approximately $79 million and $206 million respectively.2

The bill may also result in a revenue loss to the constituent units as revenue-generating contracts would also be subject to the bill's requirements. The amount of potential revenue loss depends on the same factors described above. For context, in FY 16, revenue from these contracts totaled approximately $167 million across the constituent units.

The Commission on Human Rights and Opportunities (CHRO) is responsible for handling the complaints that may arise from the policy provisions outlined in the bill. Depending on the number of complaints filed, CHRO may need to hire one Human Rights and Opportunities Representative at a cost of $68,294 in FY 19 (including fringe benefits), adjusted for the effective date of the bill, and $91,059 (including fringe benefits) in FY 20.

The Out Years

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

1 The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller. The estimated active employee fringe benefit cost associated with most personnel changes is 36.33% of payroll in FY 19 and FY 20.

2 The UConn amount is lower because it excludes purchases at or below $50,000. The UConn figure is based on purchase orders issued in FY 17, while the UConn Health amount is based on actual spending in FY 17.