OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
EMERGENCY CERTIFICATION
HB-6671
AN ACT CONCERNING FUNDING FOR SCHOOL LUNCHES AND
A CENTER FOR SUSTAINABLE AVIATION, SPECIAL EDUCATION
FUNDING, CERTAIN BOTTLE DEPOSITS, CERTAIN STATE
POSITIONS AND THE POSTING OF STATE JOB OPENINGS AND
BOND COVENANT RESTRICTIONS AND THE BUDGET RESERVE
FUND.
Primary Analyst: PR 2/9/23
Contributing Analyst(s):
OFA Fiscal Note
State Impact: See Below
Municipal Impact: See Below
Explanation
Section 1 reallocates $60 million in FY 23 American Rescue Plan Act
(ARPA) funding from the Office of Policy and Management to the State
Department of Education for Free Meals for Students. This allocation
supports universal free breakfasts and lunches for all students who: 1)
do not otherwise receive free meals; and 2) do not attend schools that
provide free meals to all students via the federal Community Eligibility
Provision program. The bill is anticipated to provide funding for
universal school meals through FY 23.
Sections 2 - 3 reappropriate $12 million from the Department of Social
Services Medicaid
1
account to the Department of Economic and
Community Development's (DECD) Other Expenses account to support
the establishment of the center for sustainable aviation. Any
unexpended balance will carry forward into FY 24 for this purpose.
Section 4 requires DECD, under certain conditions, to provide a grant
of up to $20 million to the University of Connecticut to support the
1
The current projected lapse to the Medicaid account for FY 23 is $195 million. 2023HB-06671-R00-FN.DOCX Page 2 of 4
establishment, development and operation of a center for sustainable
aviation. If required by the terms of this section, the grant will be funded
through the appropriation under Secs. 2 and 3 of this bill and $8 million
from the Manufacturing Assistance Act bond authorization that is
dedicated to the purpose under Sec. 5.
The grant will represent the portion of the state's share of the capital
costs to the center, as needed if the University of Connecticut is awarded
federal funding for the center.
Section 5 makes changes to the Economic Deve lopment and
Manufacturing Assistance Act (MAA) to allow the program to be used
to provide a grant of up to $8 million to UConn as described in section
4.
MAA is funded through General Obligation (GO) bond funds. Future
General Fund debt service costs may be incurred sooner under the bill
to the degree that it causes authorized GO bond funds to be expended
or to be expended more rapidly than they otherwise would have been.
As of January 1, 2023, the unallocated bond balance available under the
MAA authorization is approximately $54.6 million. The bill does not
change GO bond authorizations relevant to the program.
Sections 6 and 7 reduce the GO bond authorization for the UConn 2000
program by $12 million in FY 25. To the extent the funds would have
otherwise been spent and issued, these sections result in a potential cost
reduction to the General Fund debt service after the biennium.
Sections 8 – 10 eliminate a projected lapse in the special education
Excess Cost grant estimated to be $27.1 million in FY 23, and preclude
any potential lapses or deficiencies in the account in the out years. There
is a corresponding revenue gain to local and regional boards of
education in FY 23 of approximately $27.1 million.
These sections increase the required level of tiered reimbursement, in
FY 23 and annually thereafter, from the State Department of Education
(SDE) for special education Excess Cost-eligible expenses. The sections
also specify the proportionate increases or reductions SDE must apply
to the Excess Cost grants in the event that applying the
tiered reimbursement levels produces a total grant amount that differs
from the appropriation. The impact in the out years to local and regional 2023HB-06671-R00-FN.DOCX Page 3 of 4
boards of education eligible for the grant is a revenue gain; the amount
will vary depending on Excess Cost appropriation levels,
reimbursement tier, and the amount of actual qualifying expenditures.
Section 11 clarifies which beverage containers are covered under the
bottle bill expansion enacted in PA 21-58, AAC Solid Waste Management.
This does not result in any fiscal impact.
2
Sections 12 and 13 make changes that do not result in a fiscal impact.
Section 14 requires that certain bonds issued after July 1, 2023, and prior
to July 1, 2025 include a pledge requiring the state to comply with
specified state statutes effective July 1, 2023 for up to 10 years. The
impact of the applicable sections, if changed by this act, is provided in
the relevant sections of the fiscal note.
Section 15 raises the Budget Reserve Fund cap from 15% to 18% of net
General Fund appropriations in a fiscal year. The fiscal impact is
unknown, as it is dependent on the existence of future surpluses and
decisions made by the State Treasurer regarding excess BRF fund
distribution. The policy change would apply to Budget Reserve Fund
calculations beginning in the fall-winter of 2024.
As an illustration, this policy change would have increased the FY 23
Budget Reserve Fund balance from approximately $3,313.4 million (at
the 15% rate) to $3,976.1 million (at the 18% rate) for a difference of
$662.7 million. Correspondingly, the $662.7 million would no longer
have been available to offset long-term obligations primarily including
unfunded pension liabilities in the Teachers' Retirement System and
State Employees Retirement System.
Between the 15% rate and the 18% cap, Section 15 requires an equal
(50/50) distribution of future surplus funds between the Budget
Reserve Fund and other long-term obligations. Under Section 15 any
surplus funds above the new 18% cap would go towards other long-
term obligations as under current law.
Section 16 freezes the limit on appropriations relative to budgeted
revenues for the General and Special Transportation funds at the current
(FY 23) rate of 98.75%. Under current law, the rate is scheduled to
2
The fiscal note for PA 21-58 did not assume any of the items clarified as exempt in
this bill would be part of the bottle bill expansion included in that Act. 2023HB-06671-R00-FN.DOCX Page 4 of 4
decrease by 0.25 percentage points each fiscal year until it reaches 98.0%
in FY 26. Using the FY 23 budget to illustrate, the difference between the
98.75% and 98.0% rates is approximately $168 million and $16 million in
the General and Special Transportation funds, respectively.
3
The policy
change would apply beginning with the formulation of the FY 24
budget.
Sections 17 and 18 make various changes to GO bond limits and annual
caps for GO bond allocation, issuance, and allotment. To the degree
bond spending in future years differs as a result of adjustments, there
would be commensurate change to future debt service requirements.
Any associated costs or savings will be dependent on actual use of bond
funds, changes in market conditions, and changes in factors that impact
the state's own costs of borrowing.
Section 19 has no impact, as it repeals an obsolete and unused provision
of statute.
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.
3
As adopted, the FY 23 budgeted differences using the required 98.75% rate were
$279.8 million in the General Fund and $26.1 million in the Special Transportation
Fund.