OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-1358
AN ACT CONCERNING EQUITABLE COMPENSATION FOR
STATE-CONTRACTED NONPROFIT HUMAN SERVICES
PROVIDERS.
Primary Analyst: ES 3/18/25
Contributing Analyst(s): LD, LG
Reviewer: LD
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 26 $ FY 27 $
Social Services, Dept. GF - Cost $55 million at least $55
million
Various GF - Cost at least $72
million
at least $72
million
Resources of the General Fund GF - Revenue
Gain
at least $20
million
at least $20
million
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill results in a significant cost to the state associated with
requiring annual increases in non-profit human services provider
contracts and Medicaid rates. The increase is based on any percentage
increase in the consumer price index (CPI) for urban consumers in the
northeast region for the previous calendar year. This does not apply if
the CPI decreases. Based on calendar year 2024, this results in a 3.5%
increase in FY 26.
Based on historical increases for human services related providers,
the bill is anticipated to result in additional state costs of at least $72
million in FY 26 and FY 27. This results in a related federal grants
revenue increase of approximately $20 million to reflect the federal
share of Medicaid eligible expenditures that are gross funded outside of 2025SB-01358-R000134-FN.DOCX Page 2 of 2
the Department of Social Services (DSS).
The bill also results in a state cost to DSS of approximately $55 million
in FY 26 and at least $55 million in FY 27 based on Medicaid
expenditures to non-profit providers.
If the applicable CPI increases similarly in FY 27, the state will incur
additional costs of at least $127 million with a corresponding federal
grants revenue gain of at least $20 million.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.