OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-252
AN ACT ESTABLISHING TAX CREDITS FOR EMPLOYERS WHO
MAKE PAYMENTS TOWARD TUITION COSTS OF EMPLOYEES
AND FOR TAXPAYERS WHO DONATE TO ENDOWED
PROFESSORSHIPS.
Primary Analyst: CW 3/29/22
Contributing Analyst(s): JS
Reviewer: MM
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 23 $ FY 24 $
Department of Revenue Services GF - Revenue
Loss
None 115-160
million
Department of Revenue Services GF - Cost 110,465 72,703
State Comptroller - Fringe
Benefits
1
GF - Cost 14,374 29,467
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill, which establishes tax credits for tuition reimbursement and
endowed professorship donations, results in: 1) a General Fund revenue
loss of $115 million to $160 million annually beginning in FY 24, 2) a
one-time cost to the Department of Revenue Services (DRS) of $75,000
in FY 23 only, and 3) an on-going cost to DRS of $49,839 in FY 23 (partial
year) and $102,170 in FY 24 for salary and fringe benefit costs associated
with one Revenue Examiner.
Section 1 establishes a tax credit under the corporation business and
insurance premiums taxes for 50% of tuition reimbursement costs,
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 40.53% of payroll in FY 23. 2022SB-00252-R000218-FN.DOCX Page 2 of 2
capped at $2,500 per employee. Based on a national employer tuition
reimbursement market estimated to be between $20 billion and $28
billion annually, this results in a revenue loss of between $113 million
and $158 million each year beginning in FY 24.
2
Section 1 also results in a one-time cost to DRS of $75,000 in FY 23 for
updates to the online Taxpayer Service Center and internal CTax
integrated tax administration system, as well as an ongoing annualized
cost of $102,170 ($72,703 for salary and $29,467 for fringe benefit costs)
for one Revenue Examiner for audit and compliance.
Section 2 allows a tax credit under various taxes for amounts donated
to an endowed professorship at a Connecticut public higher education
institution.
3
This results in a revenue loss of up to $2 million each year
beginning in FY 24.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.
Sources: Georgetown University Center on Education and the Workforce
International Foundation of Employee Benefit Plans
2
Data from the International Foundation of Employee Benefit Plans indicates that the
most popular reimbursement amount to employees is $5,000 to $5,999.
3
For context, there are currently 122 endowed professorships and chairs between
UConn and UConn Health.