connecticut fy 2006 – fy 2007 biennium governor’s budget m. jodi rell, governor february 9, 2005...

CONNECTICUTFY 2006 – FY 2007 BIENNIUM

GOVERNOR’S BUDGET

M. JODI RELL, GOVERNOR

February 9, 2005 * Photo by William Hubbell

2

Introduction

• Connecticut is in the sixth consecutive year of difficult budget climates and, frankly it is not getting any easier

• Over the last three years, the state has:– Raised taxes by approximately $900 million

– Emptied the “Rainy Day Fund”

– Swept pre-existing fund balances

– Borrowed $319.7 million to make ends meet

• And yet, the state enters FY 2005-06 with a:– $1.2 billion current services deficit

– Spending plan that would exceed the Constitutional cap by approximately $800 million in each year of the biennium

3

Introduction

• While there are difficult choices to be made, there are reasons for optimism:

– Growth in personal income of 4.1% in FY 04 and a projected 4.5 % in the current fiscal year

– Job growth with a projected gain of over 7,000 jobs in FY 05; and approximately 17,000 jobs in FY 06 and 14,000 in FY 07

– The state will deposit approximately $300 million into its “Rainy Day Fund” as soon as the Comptroller certifies the surplus for FY 04

• Governor Rell’s proposed budget invests in:– The future of our children

– Connecticut’s environment

– A 21st century transportation system

• All while controlling the growth of spending

4

Introduction

• As the FY 2005-07 biennial budget was being prepared, Governor Rell was faced with a projected structural deficit of $1.2 billion in FY 06

• Given the magnitude of the structural gap and the constraints of the spending cap, Governor Rell is proposing significant structural changes on each side of the ledger – spending reductions and revenue enhancements

• While preparing this budget required difficult decisions, it represents what is needed to balance the budget and preserve the economic health of the State of Connecticut

5

Introduction

• Governor Rell is proposing an all funds budget of $15.27 billion for FY 06 and $15.86 billion for FY 07. This represents:

– A FY 06 all funds increase of $579.2 million from estimated expenditures this year, or 3.9%

– A FY 07 all funds increase of $591.9 million, again 3.9%

• Governor Rell is proposing a General Fund budget of $14.12 billion for FY 06 and $14.68 billion for FY 07. This represents:

– A FY 06 General Fund increase of $528.8 million from estimated expenditures this year, or 3.9%

– A FY 07 General Fund increase of $556.3 million, again 3.9%

6

Introduction

• To close the $1.2 billion gap, Governor Rell has balanced revenue enhancements with spending limitations

• In the first year of the biennium, current services spending was reduced by:

– A net $563.7 million in the General Fund

– A net $623.5 million in all funds

• Similarly, to close a $1.5 billion gap in the second year, current services spending was reduced by:

– A net $746.4 million in the General Fund

– A net $806.3 million in all funds

• In each year of the biennium, 53.8% of the structural gap is being covered by the spending side

7

Introduction

• Governor Rell is leaving room under the spending cap to cover potential deficiencies during the biennium

• The final recommended amounts are under the cap by $45.3 million in FY 06 and by $63.6 million in FY 07

• These amounts do not reflect the expenditure of both federal and state funds generated by a nursing home provider tax. The expenditure of these funds would exceed the cap in the first year of the biennium

8

The Constitutional Cap on Spending

• Governor Rell believes that the Constitutional cap is an essential protection for Connecticut’s taxpayers

• The cap has served voters well - keeping the average annual rate of growth in the state budget to about 4.5% over the last 10 years

• Over the biennium, the state can obtain $237.7 million of new federal funds by implementing a provider tax system

• Governor Rell’s proposal utilizes these new federal funds for increases to nursing homes and other caregivers who serve our neediest citizens

9

The Constitutional Cap on Spending

• Governor Rell rejects irresponsible approaches suggested by some that “off budget accounts” be established which purport to be outside the cap on spending

• The Governor believes the cap is an important tool of state government budgeting and she does not recommend exceeding it lightly, but in these trying fiscal times $237.7 million of federal money is just too much to leave in Washington

• The Governor, however, insists that if the state is going to exceed the cap, we say so, we say why and what for, and that we do so in a manner that is consistent with the Constitution

• Within the context of a responsible budget, the Governor would issue the required declaration as a precedent for 3/5ths vote

10

Disposition of the FY 2004-05 Surplus

• To mitigate tax increases and spending cuts, and to stabilize the budget, Governor Rell proposes several initiatives for use of the estimated $335.6 million FY 05 surplus:

– Deposit $41.7 million in the Budget Reserve (Rainy Day) Fund

– Pre-pay $137.7 million in existing debt

– Appropriate $79.1 million primarily for one-time expenses

– Transfer $20 million to Biomedical Research Fund for stem cell research

– Carry forward $57.1 million in lapses to offset FY 06 appropriations

11

Tax Changes and Revenue Enhancements

• Tax increases focus on areas that will help create important investments for the future quality of life in Connecticut and does not damage the economy

• Total tax increases are limited to approximately $140.3 million, excluding the adoption of the nursing home provider tax, which helps generate significant federal revenue and more adequately reimburses a myriad of private providers in our communities

12


• Increasing the Cigarette Tax– By $0.74 to $2.25 per pack to raise $104 million in FY 06 and $87.6

million in FY 07

– New Jersey, Rhode Island and New York City will still have cigarette taxes that are higher than Connecticut’s

• Increasing Taxes on Other Tobacco Products– Increase tax on cigars, pipe and chewing tobacco from 20% to 90%

of the wholesale price; snuff from $0.40 to $1.80 per ounce

– Will raise $15.7 million in FY 06 and $15.4 million in FY 07

• Increasing Alcohol Taxes– Increase by 15% to raise $7.9 million in FY 06 and $7.1 million in

FY 07 (As an example, this would be $0.02 increase on a six pack of beer)

13


• Corporation Tax Changes– Phase-out the corporate tax surcharge from 25% to 15% in

income year 2005 and to 10% in income year 2006 raising $67.1 million in FY 06 and $10.9 million in FY 07. The surcharge will sunset effective December 31, 2006

– Return to a five-year net operating loss carry forward provision generating $7.4 million in FY 06 and $17.9 million in FY 07

– Eliminate the research and development tax credit exchange program effective for the 2005 income year saving $20 million in FY 07

14


• Deferring proposed tax cuts– Maintain current property tax credit at $350 - $105 million per

year. Governor Rell calls for increasing the credit annually by $50 beginning in income year 2007 until it reaches $500 in income year 2009

– Defer the increase in the singles’ exemption - $7 million in FY 06 and $20 million in FY 07

– Defer phase down in the Gift tax for 2 years - $6 million in FY 07

– Defer the Succession tax phase out - $11 million in FY 06 and $26 million in FY 07

15


• Escheating Unclaimed Bottle Deposits– Unclaimed deposits would go to the state

– Raises $20 million in FY 06 and FY 07

• Miscellaneous Revenue Changes– Enhance the Department of Revenue Services’ audit and

collection activities thereby increasing general fund revenue by $19.5 million in FY 06 and $24.6 million in FY 07

– Securitizing unclaimed property in year two of the biennium generating $40 million in FY 07

16

Reforming Government – Fairness Over Favoritism

• Convert the State Ethics Commission to the Citizens’ Ethics and Government Integrity Commission

• Create the Contracting Standards Board which will develop a Uniform Procurement and Contract Code for state agencies

• Reform campaign financing – reducing the influence of special interest and big money

17

Breaking the Gridlock

• Governor Rell is proposing the largest capital investment in Connecticut’s transportation system in decades. The $1.3 billion investment includes:

– $667 million for new rail cars for the New Haven Line which leverages approximately $350 million of MTA/New York State Funds

– $300 million for new rail maintenance facilities

– $187 million for operational improvements/congestion mitigation on I-95 from Greenwich to the Rhode Island border

– $150 million for improvements to other state/interstate roads

– $7.5 million for new transit buses

• These expenditures are in addition to the $180 million in the state’s annual capital program

18

Breaking the Gridlock

• Governor’s proposal will be funded through:

– Use of Transportation Strategy Board Project Account to pay part of the capital and debt service cost of the New Haven Line revitalization program

– Imposition of $1 per trip surcharge on all tickets for trips on the New Haven Line, to begin in 2008

– Increase gasoline tax by one penny in FY 06, FY 07, FY 09 and FY 14 and by two pennies in FY 08

25

3031

3029

2726

32

36

39

36

24

28

32

36

40

'96 '97 '98 '99 '01 '06 '07 '08 '09 '14 '17

Fiscal Year

Cen

ts P

er G

allo

n

CT Gasoline Tax Per Gallon(In Cents)

• By using the ticket surcharge and TSB funds to pay cash for a portion of the plan, Governor Rell saves CT taxpayers $245 million in interest

19

Education – From Birth Through College and Beyond

• Governor Rell’s Early Childhood Investment Initiative provides annually:

– $5.5 million for an innovative Statewide Early Childhood Pilot Program for new public-private partnerships

– $1 million scholarship program for 330 early childhood education teachers

– $2 million in General Obligation bonds for capital improvements

– $1 million as a debt service subsidy to finance up to 1,000 new early childhood slots

– $250,000 for technical assistance to local centers

– $300,000 for training to implement the high quality Connecticut preschool curriculum

20


• Governor Rell’s preschool program will also provide:– Increased School Readiness funding for the 7,000 enrolled children

to $7,750 in FY 06 and $8,025 in FY 07 by adding $2 million and $4 million respectively

– Funding for:

The development of a kindergarten assessment program

“Great Beginnings” program which helps parents recognize developmental milestones that initiate a child’s cognitive learning

Early Childhood Investment Advisory Cabinet and an early childhood policy research network

21


• Investing in Technology– Provide $15.5 million over the biennium to put laptop computers on

every desk in 9th and 10th grade English classes in the state, including professional development and ancillary costs

– Governor includes operating funds for the Connecticut Education Network

• Reducing Racial Isolation/Improving Urban Education– Financially stabilize RESC-operated magnet schools; increase subsidy

per child to $6,250 in FY 06 and to $6,500 in FY 07

– Encourage early participation in the OPEN Choice program by funding all-day kindergarten program and reducing bus ride time

– Increase OPEN choice receiving district subsidy from $2,000/year to $3,000 in FY 06 and $3,500 in FY 07; transportation subsidy from $2,100/year to $2,850

22


• Governor Rell’s proposal constitutes a 5% increase in elementary and secondary school educational funding in FY 06

• Special Education– Governor Rell’s budget includes a $25.5 million or a 38% increase in

special education funding.

• Education Finance and Accountability– Budget includes a 2% increase in entitlements for all towns in ECS

– Create the Commission on Educational Finance and Accountability to assess the interrelationship of various education funding streams and make appropriate recommendations

23


• School Construction– Governor’s budget proposes school construction grants of $605

million in FY 06 and $675 million in FY 07 which is 56% of the GO bonds proposed for the biennium

Local School Construction Bond Authorizations

$-

$100

$200

$300

$400

$500

$600

$700

$800

96 97 98 99 00 01 02 03 04 05 06Est.

07Est.

Fiscal Year

Mill

ion

s

24

Education – From Birth Through College and Beyond• Higher Education

– Governor’s budget continues the commitment to state colleges and universities by increasing block grants by 2.4% in FY 06 and 1% in FY 07

– Proposed capital funding for the biennium includes: University of Connecticut - $168 million Connecticut State University System - $165.3 million Community/Technical College System - $162.6 million

– Budget continues the commitment to scholarship funds for Connecticut residents attending public or private colleges

– Governor proposes an absolute one-year tuition freeze for students at UCONN, CSU and the CTCs

25


• The graph below demonstrates that, as a result of prudent past management, our higher education institutions are on sound fiscal footing enabling them to forego a one year tuition increase

Constituent Unit

Foundation Assets

($Millions)

Operating Fund ($Millions)

Assets and Operating Fund ($Millions)

UCONN 298 58 356CSU 33 49 82CTCs 19 45 64

Constituent Unit Foundation and Operating estimated balances as of 6/30/04

26

The Workforce Initiative: Preparing Connecticut Workers and Future Workers for the Jobs of the 21st Century • Governor’s Budget

– $1.75 million in funding to encourage workforce growth in shortage areas like nursing and teaching

– $2.5 million for job programs such as Jobs Funnel

– $3 million for the 21st Century Skills Fund to help train/retrain workers

– $500,000 to develop a seamless electronic system for licensing/ permitting activities by state agencies

– Retrain older manufacturing workers by using the existing Manufacturing Assistance act for a Next Generation Manufacturing initiative to promote market growth

– Create an integrated marketing program for DECD, CDA and CII

– $20 million for stem cell research

– The Jobs Cabinet will help create a seamless pre-k through 16 educational system

27

Caring for the Elderly

• Helping those who help others – the provider tax

– In order to receive additional federal funding, a 6% tax on nursing home services is proposed

– Because nursing home medical rates are reimbursed approximately 50% under the federal Medicaid program, over $118 million in federal dollars will flow into the state each year

Fiscal 2006

Fiscal 2007

Revenue Provider Tax at 6% 139.2$ 139.2$ Federal Matching Funds 118.6 119.1 Total Revenue 257.8$ 258.3$

Expenditures Incr. Appropriations to Providers 260.4$ 261.4$ Total Expenditures 260.4$ 261.4$

Net Cost (2.6)$ (3.1)$

Provider Tax(In Millions)

28

Caring for the Elderly• Helping those who help others – the provider tax

– The additional federal dollars will fund a new 4% net increase in Medicaid rates not only to every nursing home in the state but also to those many other caregivers in the state who provide services to persons with disabilities, abused and neglected children and homebound elderly

– The rate increases will assist our partners in these efforts to stabilize their workforce, meet rising expenses and continue to provide the services

– Unlike other proposals pending before the legislature, the Governor’s plan would not require a waiver and therefore can be instituted quickly

FY 02 FY 03 FY 04 FY 05 FY 06

Nursing Homes 2.5% 2% eff. 1/1/03 2% eff. 1/1/04 1% eff. 1/1/05 4.0%Intermediate Care Facilities for the Mentally Retarded 2.5% 0.0% 2% eff. 1/1/04 5.0% 4.0%Assisted Living Services Agencies 2.7% 0.0% 2.0% 0.0% 4.0%Personal Care Attendants 2.7% 0.0% 2.0% 0.0% 4.0%Home Health Agencies 2.7% 0.0% 2.0% 0.0% 4.0%Private Grant-Funded Providers 3.5% 1.5% eff. 11/1/02 0.0% 1.5% eff. 10/1/04 4.0%

Enhanced Provider Rates

29

Caring for the Elderly

• Providing real choices for long-term care– The Governor’s budget calls for spending

approximately $218.9 million for alternatives to nursing homes in FY 06 and $239.5 million in FY 07

30

Caring for the Elderly• Over the last few years, one of

Connecticut’s most important long-term care initiatives was the expansion of assisted living services in new subsidized assisted living communities, state-funded congregate housing and federally financed HUD complexes

• These alternative housing and living arrangements provide alternatives that help keep seniors in their communities

• The Governor’s biennial budget continues funding for these important alternatives to long term care

Growth In Nursing Home Alternatives

$239.5

$218.9

$195.7

$179.2

$157.6

$143.3

$118.3$130.8

$75

$100

$125

$150

$175

$200

$225

$250

$275

Fiscal YearE

xpen

ditu

res

($M

)

31

Preserving the Safety Net While Controlling Costs

• The proposed budget preserves the safety net while controlling costs

• To continue to provide services to the most needy, some changes in benefits, service levels and eligibility are necessary

• Significant Changes to the Department of Social Services Budget

– Disproportionate share payments to hospitals will be capped at $80.275 million in FY 07, a reduction of $15 million

– Eliminates the subsidy to the Connecticut Children’s Medical Center in FY 07

– Reduce or eliminate some programs and services for non-citizens

32

Preserving the Safety Net While Controlling Costs• Reductions in Medicaid benefits:

– Restructure DSS prior authorization requirements for non hospital inpatient detoxification, nursing and home health aides and behavioral health services

– Establish medical criteria for admissions and stays at Chronic Disease hospitals

– Impose $3 co-payments on doctor, outpatient and pharmacy visits

Medicaid Expenditures and Eligibles

$2,0

40.1

$1,9

97.9

$2,2

16.9

$2,3

72.9

$2,5

53.0

$2,7

03.2

$2,7

86.3

$2,9

81.4

$3,1

35.9

$3,2

25.2

$85.8

$45.8

$1,500

$1,700

$1,900

$2,100

$2,300

$2,500

$2,700

$2,900

$3,100

$3,300

$3,500

'98 '99 '00 '01 '02 '03 '04 '05Est.

'06Fcst.

'07Fcst.Fiscal Year

Exp

en

dit

ure

s (

$M

)

0

50

100

150

200

250

300

350

400

450

500

Avera

ge E

lig

ible

s (

Th

sd

)

Actuals/ Current Services Final Recommended Average Eligibles

33


• The budget proposes to increase premiums under HUSKY B to yield savings of $2.2 million in FY 06 and $4.8 million in FY 07

– Children in families with income between 185% and 235% of the federal poverty level (FPL) will have a $30/child premium, up to a family maximum of $50/month

– Children in families with income between 236% and 300% of the FPL will have a $50/child premium, up to a family maximum of $75/month

34


• Restructuring health insurance for low income workers:

– A reduction in transitional Medicaid coverage from 24 months to 12 months for a savings of $13.4 million in FY 07

– Expand the Medicaid program to make employer-sponsored health insurance accessible to low-income workers through a premium assistance pilot program

– Implement premium assistance strategy for HUSKY A families utilizing Medicaid funds to help them purchase health insurance from their employers. Develop a premium assistance “wrap-around” program for HUSKY A families to ensure no loss of benefit between Medicaid and private insurance while utilizing existing employers health insurance policies. Implementation to occur in FY 07

35


• Medicare Part D Prescription Drug Benefit– Benefits to begin January 2006 through plans that provide prescription

drug coverage

– Beneficiaries are responsible for premiums, deductibles and co-pays with exceptions for low-income and institutionalized individuals

– Beneficiary drug costs exceeding the initial limit of $2,250 annually are responsible for additional costs until out-of-pocket costs reach $3,600 when Medicare Part D becomes effective with nominal cost sharing

• Medicaid– 61,900 persons eligible for both Medicaid and Medicare will no longer

receive prescription drug coverage from Medicaid but will receive Part D-covered drugs through Medicare starting January 1, 2006

– To finance Part D, states must contribute to a “phased down state contribution” or “clawback” - $49.6 million in FY 06 and $109.2 million in FY 07

36


• Medicare Part D - ConnPACE– To avoid negative impact of Part D on ConnPACE enrollees, the Governor

proposes covering the costs of all premiums and cost sharing requirements beyond the current the $16.25 co-pay and $30.00 annual registration fee

– Enrollment in Medicare Part D must be a condition of ConnPACE eligibility

ConnPACE Expenditures and Caseload

$22.6

$25.0

$32.8

$37.9

$41.9

$69.2

$75.3

$66.0 $49.5

$57.8

$87.4

$107.0

0

20

40

60

80

100

120

'98 '99 '00 '01 '02 '03 '04 '05Est.

'06Fcst.

'07Fcst.Fiscal Year

Exp

endi

ture

s ($

M)

5

15

25

35

45

55

Cas

eloa

d (T

hsd.

) .

Actuals / Final Rec. Current Services Average Caseload

37


• Medicare Part D - State Retirees and Teachers

– The state as employer, has the opportunity to apply to the federal government for the employer subsidy which is 28% of allowable costs (Approximately $12 million in FY 06 and $28 million in FY 07)

– The Teachers’ Retirement Board provides drug coverage but questions remain if the coverage is actuarially equivalent to qualify for the subsidy

38


• Pharmacy Initiatives– Reduce the reimbursement level to pharmacy providers from the

average wholesale price (AWP) minus 12% to AWP minus 15% ($11.4 million in FY 06, $8.8 million in FY 07)

– Expand the number of generic drugs subject to the maximum allowable cost reimbursement schedule ($1.9 million in FY 06, $1.1 million in FY 07)

– Reduce reimbursement for OTC drugs, diabetic supplies and certain nutritional supplements to equal the average wholesale price ($1.7 million in FY 06, $1.0 million in FY 07)

– Reduce the dispensing fee paid to pharmacy providers for each prescription filled from $3.15 to $3.00 ($700,000 in FY 06, $400,000 in FY 07)

– Maximize pharmacy rebates by modifying billing requirements for injectable drugs administered in a physician’s office ($60,000 in FY 06, $70,000 in FY 07)

39


• Other areas of growth in the Department of Social Services

– Provide additional funding for the Connecticut AIDS Drug Assistance Program

– Increase the base for the Security Deposit Program in FY 05 and maintain the higher level of expenditures in FY 206 and FY 07

– 2% increase in FY 06 for managed care organizations under the HUSKY program

40


• Increasing Child Care Assistance

– “Care 4 Kids” provides child care assistance to families categorized into priority groups

– The Governor proposes $4 million in TANF High Performance Bonus funds be carried forward to keep the program open

– $1.3 million TANF High Performance Bonus funds in FY 06 and $2.7 million in FY 07 will be used to maintain intake to the program

41


• Increase funding for the fixed hospitals and primary care grants under SAGA by 5%

SAGA Expenditures and Caseload

$87.6

$94.1

$105.3

$122.4

$133.8

$134.5

$143.1

$152.1

50

75

100

125

150

175

'00 '01 '02 '03 '04 '05Est.

'06Fcst.

'07Fcst.

Fiscal Year

Exp

end

itu

res

($M

)

5

10

15

20

25

30

35

Ave

rag

e M

edic

al

Cas

elo

ad (

Th

sd)

Expenditures Average Medical Caseload

42

Meeting the Needs of DMR Clients

• Continuation of the Wait List Initiative

– Governor Rell’s budget provides for the annual cost of 150 people removed from the waiting list in FY 05, FY 06 and FY 07 for a total of 450 people. At this rate, the waiting list will be nearly extinguished by 2010

FY '06 FY '07Additional cost of annualizing '05 wait list initiatives for 150 people $3.7 million $3.9 million

Funding for another 150 new cases to be served in '06 $4.4 million $8.3 million

Cost of service for new 150 persons in '07 $4.4 million

Total $8.1 million $16.6 million

43

Meeting the Needs of DMR Clients

• Providing resources for high school graduates and young adults

– The Governor proposes adding $4.2 million in FY 06 and $4.8 million in FY 07 so that services can be delivered to up to 244 individuals in FY 06 and an additional 229 in FY 07 who are graduating from high school programs or turn 21 and “age out” of particular systems

– The Governor also proposes adding $1.6 million for services to up to 68 individuals in FY 06 and an additional $1.9 million to serve 52 more individuals in FY 07 to properly transition young adults from DCF to DMR

44

Meeting the Needs of DMR Clients• In an effort to address case management caseloads, the

Governor provides funding for DMR to hire an additional 20 staff

Department of Mental Retardation Caseloads and Expenditures

$514.0

$540.0

$579.0

$627.0

$655.0

$701.0

$719.3

$718.9

$754.5

$823.0

$848.4

$450

$550

$650

$750

$850

'97 '98 '99 '00 '01 '02 '03 '04 '05Est.

'06Fcst.

'07Fcst.

Fiscal Year

Exp

endi

ture

s ($

M)

15

16

17

18

19

20

21

22

Cas

eloa

d (T

hsd)

Net Expenditures Caseload

45

Investing in Behavioral Health

• Implementing a community-focused system under KidCare– To reduce system fragmentation and reliance on acute care, and to

increase the use of community-based approaches, DCF and DSS are moving ahead with behavioral health care restructuring

– KidCare is a coordinated approach to clinical management and administration of behavioral health for adults and children covered under HUSKY A & B and DCF Voluntary Services

– Behavioral health services will be carved out from HUSKY MCOs into a fee-for-service arrangement managed by an administrative services organization (ASO), fully operational by July 2005

– In addition to the carve-out, the budget adds $9.8 million in FY 06 for increased services and improved management

– The ASO will be under a flat-fee management contract while the state will set provider rates, enter into contracts and pay providers for services rendered

46


• Supportive Housing “Next Steps” Initiative

– Supportive housing combines affordable rental housing with individualized health, support and employment services

– The state has established over 1,000 supportive housing units

– Governor Rell’s program provides for 1,000 units, 500 of which will be funded in the biennium

– CHFA would issue tax-exempt bonds to finance the project with the debt service covered by the state

• Supportive Housing extends best practices of supporting families and young adults who frequently use crisis and emergency services in a stable cost effective manner

47


• DMHAS funding increases– An additional $1.6 million for medications and $2.3 million to maintain

nursing coverage– $1.9 million in FY 06 and $4.1 million in FY 07 for anticipated caseload

growth of 5% in the General Assistance Behavioral Health Managed Care program

– $3.1 million to continue “Second Initiatives” programs: Assertive Community Treatment teams which provide intensive case

management Mobile crisis and respite programs Programs that provide transition from inpatient stays Programs for high risk discharges that provide community services tied to

housing– $1.2 million in FY 06 and $1.3 million in FY 07 to create a discharge

fund to follow 25 difficult-to-discharge clients– $500,000 for contracting with an additional 2 hospitals for acute care

services– $217,500 for an interactive web based inventory of services

48

Department of Children and Families

• Pursuant to the Juan F consent decree, an exit plan has been developed by the court. Court approved compliance with the exit plan will result in significant additional services and protections for neglected and abused children, and return jurisdiction to the state by November 2006

49


• Changes in Current Services

– Cost of new programs FY 06 $20.9 million and FY 07 $33.4 million

– Twenty-five social work positions to be funded

– Seven new group homes for children

– Family support teams to reduce residential placements by almost 200 by end of FY 06 are fully annualized

– A CJTS monitor who will report to the Child Advocate

– Additional funding for adoption and foster care caseload growth

50


• An additional $23.5 million in FY 06 and an annualized cost of $30.1 million for FY 07 to fund new initiatives

– $8.2 million in FY 06 and $12.2 million in FY 07 for transitional living, group home, and apartment programs for young adults

– $4.2 million in FY 06 and $5.2 million in FY 07 for intensive in-home and other community based family focused services

– Eliminate financial disincentives to adoption

– Develop a central intake for statewide inquiries from prospective families for foster care and adoption

– Case management and services for families having difficulty with an adoption

– The state will subsidize postsecondary education for DCF youth adopted after 1-1-2005

51


• Capital investments– $2.5 million to improve private non-profit residential facilities

and group homes each year

– $500,000 for capital renovations and improvements to mental health clinics each year

– $5.2 million in FY 06 and $2.2 million in FY 07 for improvements and renovations to state-run facilities

52

Public Safety

• Establishment of the Department of Emergency Management and Homeland Security

• Planning & coordination between emergency management and homeland security

• Improved communication with other state, federal and local entities

• Establishes a clear chain of command when responding to all disasters

• The Governor’s budget reallocates resources from the Department of Public Safety and Military Department to DEMHS

53

Public Safety

• Governor Rell fully funds a new state trooper class to meet the mandated 1,248 trooper count in 2006 for the first time in 4 years

1,03

3

1,24

8

1,20

8

1,18

3

1,23

7

1,24

8

1,10

1

975

1,075

1,175

1,275

'00 '01 '02 '03 '04 '05 '06

Fiscal Year

Sw

orn

Pos

ition

s

Department of Public SafetyTrooper Strength

54

Public Safety

• Motor Vehicle Licensing Reform

– $10 million in capital funds to upgrade on-line processing of registration data

Registration and licensing data will be immediately available to law enforcement whereas currently it takes 60 days or longer to be recorded in the system

– A license-fraud prevention plan to issue a temporary license/card for 60 days while DMV completes a check on the applicant

– Tightening the issuance of permanent documents to include tougher standards for verifying an applicant’s identity

55

Valuing Our Environment

• To address the deterioration of our state parks, Governor Rell provides:

$25 million in bond funds over the biennium to enhance and repair facilities and grounds at our state parks

• $20 million in bond funds over the biennium to continue our commitment to preserve open space

• To further enhance our continuing efforts to maintain Long Island Sound and our lakes and rivers as clean and viable systems, Governor Rell provides:

– $100 million in revenue bonds and $40 million in general obligation bonds through the Clean Water Program

56

Veterans’ Benefits

• Governor Rell is proposing to provide supplemental bonus of $50/month for our CT National Guard personnel and Reservists while they serve in Southwest Asia

• In the event a Connecticut resident is killed in Southwest Asia, the family will receive a $100,000 benefit and $50/month per child until the child reaches the age of eighteen

• Governor Rell is exempting 50% of military pensions from the state income tax

• These benefits allow us to say “thank you” to those who put their lives on the line protecting our freedoms

57

Capital Investments

• The Governor’s recommended budget will keep the state well below the statutory bond limit

Net New General ObligationStatutory Bond Authorizations By Year

$1,213

$1,077

$1,313 $1,338 $1,282

$537

$1,246

$1,096

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

'00 '01 '02 '03 '04 '05 '06-Fcst.

'07-Fcst.

Fiscal Year

Bond A

uth

orizations (

$M

)

58

Capital Investments

• Governor Rell is recommending net general obligation (GO) bond authorizations of approximately $997.6 million for FY 06 and approximately $1.12 billion for FY 07

• Including UCONN, for FY 06, total GO authorizations will be a net $1.08 billion and $1.21 billion for FY 07

• Also included is $100 million in Revenue Bond authorizations for the Clean Water program for FY 07

59

Capital Investments

• The Governor is recommending Special Tax Obligation Bond (STO) authorizations of $238.9 million in FY 06 and $274.4 million for FY 07 for the state’s transportation program

– This includes $53.0 million in FY 06 and $80.8 million in FY 07 for the Governor’s multi-year $830 million in bonding for the Transportation Improvement Program for revitalizing rail cars and facilities on the New Haven Line, purchasing additional buses, making operational improvements to I-95 and other improvements to the state’s highway system to relieve traffic congestion

60

Capital Investments

• School construction authorizations will be $605 million for FY 06 and $675 million for FY 07

– This is the result of the continued demand at the local level, especially large urban centers, the magnet school program and inclusion of the Connecticut Vocational-Technical High School System in the program as well as the continued impact from the school construction financing conversion

– The school construction authorizations amount to 56% of the total net requested GO authorizations for the biennium

61

Capital Investments

• Total education related authorizations over the biennium are $1.82 billion, or 80% of the total net GO authorizations being recommended

– This includes authorizations for the school construction program and higher education authorizations

– Authorizations for the Community-Technical College System will be $64.7 million for FY 06 and $97.9 million for FY 07

– The Connecticut State University System authorizations will be $42.3 million in FY 06 and $123 million for FY 07

62

Capital Investments

• Other bonding projects included in the bond package are:– $15 million in FY 06 and $10 million in FY 07 for affordable

housing programs

– $40 million each year for the Urban Act

– $10 million each year for the Small Town Economic Assistance Program

– $30 million each year for the Local Capital Improvement Program

– $5 million each year for farmland preservation

– $10 million each year for open space acquisition

– $25 million over the biennium for improvements to state parks

63

Municipal Aid

• Governor Rell provides significant increases of about $86 million in education related grants

– The Education Cost Sharing Grant, with a $31.5 million increase, is the largest education grant

– The Excess Costs-Student Based grant for the reimbursement of special education costs has a large increase-almost $25.5 million or a 38% increase

– Magnet school grants will increase by $15 million in FY 06 and $14.5 million in FY 07, or a 22% and 17% increase, respectively

– Many of these grants will be level funded in 2007

64

Municipal Aid

• Governor Rell is proposing to add $250,000 for each of the five communities most affected by the casinos to the Mashantucket Pequot and Mohegan Fund

• The budget also recommends the elimination of the Payments-In-Lieu of Taxes and the Tax Abatements for housing authorities for a savings of $4.8 million. These programs are proposed for elimination mostly because of inequitable distribution of benefits among towns

65

Municipal Aid

Estimated RecommendedFiscal Fiscal Fiscal

Grant 2005 2006 2007

State-Owned PILOT $72.5 $72.6 $72.6College & Hospital PILOT 105.9 105.9 105.9Pequot Grant 85.0 86.3 86.3Town Aid Road Grant 20.0 20.0 20.0LoCIP 30.0 30.0 30.0Miscellaneous General 19.1 19.2 19.4Machinery & Equipment 50.7 50.7 50.7

Sub-total - General Government $383.2 $384.7 $384.9

Public School Transportation $43.1 $48.0 $48.0Non-Public School Transportation 3.3 4.0 4.0Adult Education 16.9 19.6 19.6Education Cost Sharing 1,562.9 1,594.4 1,594.4Magnet Schools 69.5 84.5 99.0Special Education 67.1 92.6 92.6Miscellaneous Education Grants 122.7 128.1 132.7

Sub-total - Education $1,885.5 $1,971.2 $1,990.3

Total - Formula Grants $2,268.7 $2,355.9 $2,375.2

Summary - Estimated Formula Grants to Municipalities (In Millions)

66

Conclusion

• It is apparent that if the growth of Connecticut’s spending remains unchecked, it will rise faster than its revenue

• The Governor’s budget makes necessary decisions with regard to both spending and revenue

• It breaks new ground to access an additional $237.7 million of federal funds over the biennium

• While curbing spending in many areas, it actually expands many protections for the neediest amongst us

• Governor Rell also chooses to invest for the long-term benefit of Connecticut in the areas of transportation, early childhood education, environmental protection, and job creation

connecticut fy 2006 – fy 2007 biennium governor’s budget m. jodi rell, governor february 9, 2005...

Documents