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Midterm Presentation CT gov

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					FY 2006-07 GOVERNOR’S
  MIDTERM BUDGET
    ADJUSTMENTS




  M. JODI RELL, GOVERNOR
      CONNECTICUT

       FEBRUARY 8, 2006
  Building
Connecticut’s
   Future
                2
Introduction
• Last year Connecticut was facing a $1.1 billion GF deficit for
  FY 06 and a $1.4 billion GF deficit for FY 07
• We are projecting a surplus of over $500 million for FY 06 and
  over $250 million for FY 07

                             February 2005                                  February 2006
                          General Fund Balance                           General Fund Balance
                            Current Services
                                                                     $800.0
                $500.0


                              FY '06             FY '07
                  $0.0                                                         $511.8




                                                          Millions
   Millions




                                                                     $400.0
               -$500.0
                                                                                            $251.4


              -$1,000.0

                             -$1,116.7
                                                                       $0.0
              -$1,500.0                                                                     FY '07
                                             -$1,447.9                          FY '06
                                                                                (Est.)      (Est.)

                                                                                                     3
 The FY 2006-07 Midterm Budget
• Governor Rell is proposing an all
  funds budget of $16.05 billion for FY
  07 representing an increase of $113.7          Nominal Growth in State Spending
  million, or seven tenths of 1%                           By Fiscal Year
  increase over the original               10%
                                                  9.6%
  appropriation for FY 07
                                           8%

• The Governor is proposing a GF
  budget of $14.9 billion for FY 07        6%

  which is projected to result in a $0.4   4%
  million surplus representing an                                           4.1%

  increase of $165.5 million over the      2%                   2.7%
  original appropriation for FY 07, or
  just 1.1%                                0%
                                                    '05        '06 Fcst.    '07 Fcst.

• The overall growth rate for the
  Governor’s midterm budget is only
  4.1% over FY 06 estimated spending
  levels

                                                                                        4
The FY 2006-07 Midterm Budget
• Governor Rell is proposing significant tax relief to our State’s
  citizens and businesses which will total $294.5 million in FY
  07
• The Governor’s tax relief package includes:
    – Elimination of the property tax on cars
    – 25% reduction of the public utilities gross receipts tax on
      electricity and gas
    – Elimination of corporate surcharge
    – Phase-out of the estate tax
    – Several job creation tax credits



                                                                     5
 Preserving the FY 2005-06 Surplus

• The Governor’s Midterm Budget anticipates that the FY 06
  surplus will be utilized in the following ways:
    – Prefund the FY 08 and FY 09 Economic Recovery Note
      payments ($85.5 million)
    – Carryforward $91 million for FY 07 expenditures
    – Deposit $335.3 million in the Budget Reserve Fund



“Those who cannot remember the past are condemned to repeat it”
              - George Santayana




                                                              6
 Preserving the FY 2005-06 Surplus

                                                      Budget Reserve Fund

• The fund’s balance               $1,600                             10% of General Fund Expenditures
                                   $1,400
 would rise to almost              $1,200

 $940 million or                   $1,000

                                    $800
                                                                                                 $937.5



 approximately 50%                          $594.7
                                                                                    $602.2




                        Millions
                                    $600

                                    $400
 higher than it has                 $200
                                                                        $302.2

                                            $30.7      $0.0    $0.0        $302.2     $300.0      $335.3
 ever been                            $0

                                   -$200
                                                                               Deposit/(Withdrawals)
                                   -$400                                       Account Balance
                                                     -$594.7
                                   -$600
                                              '01      '02      '03           '04     '05 Est.    '06 Est.
                                                                Fiscal Year




                                                                                                             7
The Expenditure Cap
• The originally adopted biennial budget was $24.3 million below
  the expenditure cap for FY 06 and $10.3 million below the
  expenditure cap for FY 07
• The Governor’s proposed budget would utilize the remaining
  room under the cap in the first year of the biennium while
  remaining $12.2 million below the cap in FY 07
• Despite the increased appropriation of $113.7 million, a slight
  improvement in room under the expenditure cap in FY 07 was
  achieved as a result of several factors. The primary factors were:
    – Faster personal income growth
    – Federal mandates and court orders
    – Fully utilizing FY 06 available cap room
                                                                    8
Reforming State Government
• Governor Rell continues to build on her past proposals to make
  state government more accountable and responsive to the needs
  of our citizens by proposing several new initiatives and
  supporting recent statutory changes:
    – Provide necessary resources for the efficient and effective operation of the
      new Office of State Ethics including increasing staff by 3 and increasing
      funding 32% over the FY 06 appropriation
    – Implementing the provisions of Public Act 05-5 An Act Concerning
      Comprehensive Campaign Finance Reform for State-wide Constitutional
      and General Assembly Offices by the establishment of the Citizens’
      Elections Fund (CEF) and by reorganization of the State Elections
      Enforcement Commission (SEEC)
    – Calling for the passage of legislation to codify the Contracting Standards
      Board, Governor Rell established through Executive Order 7b

                                                                              9
Transportation
• Builds on last year’s $1.3 billion initiative
• Most significant state commitment to new and improved public transportation
  in a generation.
• This year’s initiative of $344 million in capital funds includes:
     – Commuter rail service between New Haven, Hartford and Springfield, including
       shuttle bus between the rail line and Bradley International Airport (8 trains each
       direction with 11 stops)
     – New Britain Busway to provide an alternative route into our capital city from the
       west
     – Rail station and parking improvements on the New Haven line and Shore Line
       East
     – Facility and service improvements on the New Haven Line’s Danbury, New
       Canaan and Waterbury commuter lines
     – Rehabilitation of up to forty locomotive pulled passenger coaches used on the
       commuter lines
     – Improved transit connections between rail stations and employment centers
     – State’s share of the cost of a new rail station and parking facilities in West Haven
                                                                                      10
Transportation

• Public transportation initiatives were among the
  recommendations of the Transportation Strategy Board (TSB)
    – TSB will be involved in monitoring the progress of the initiatives and
      advising the Governor and the DOT on their implementation

• Transportion oriented development will be encouraged as part of
  these initiatives
• Greater Hartford area infrastructure improvements to enhance
  economic development in the region
• Paying for the Plan
    – The plan is fully funded and includes presumed annual operating costs for
      enhanced services
    – $40 million a year in receipts from the Petroleum Gross Receipts Tax will
      be transferred from the General Fund to the Special Transportation Fund
      starting in FY 07. In FY 11, the transfer will increase to $60 million a
                                                                             11
      year
Jobs
• Governor’s Leadership Role
    – Creates a new senior policy advisor within the Governor’s office to
      coordinate and plan economic development policy
          Governor’s liaison to the new Connecticut Finance Collaborative
            and to the Connecticut Housing Finance Authority

• Connecticut Finance Collaborative
    – Merger of three existing quasi public finance entities
          Connecticut Development Authority
          Connecticut Innovations, Incorporated
          Connecticut Health and Educational Facilities Authority
    – Provide one stop shopping for business financing
    – Coordinate more efficiently the financing needs of business
    – Work closely with the new Department of Business and Employment


                                                                        12
Jobs
• Tax Changes
   – Elimination of the Corporate Tax Surcharge - Estimated savings of
     $47 million to businesses effective income year 2007
   – Energy relief tax cut – 25% across the board cut in Connecticut’s public
     utilities tax. This will save taxpayers $44.9 million annually, more than
     50% of which benefits business
   – Job Creation Tax Credit - Available to companies that create significant
     new qualified jobs in Connecticut. A company may obtain a tax credit
     equal to 25% of the estimated withholding tax paid by the employees in
     the new jobs
   – Displaced Worker Credit – Companies will be able to take a credit
     against their corporate tax for hiring workers previously displaced
   – Film Industry Tax Credit - Available against the companies’ corporate
     income tax based on 25% of their in-state production expenses including
     payroll


                                                                         13
Jobs
 • Department of Business and Employment
     – Programs previously administered by DECD
     – Office of National and International Commerce to market Connecticut to
       both United States and foreign businesses
     – Additional support for housing and community development planning
           Provide better coordination of housing, economic development and
            transportation
     – Improved capacity to collect and disseminate statewide data and develop
       economic policy initiatives
 • Jobs and Workforce Initiatives
     – $1.5 million for Governor Rell’s 21st Century Jobs Program
           Provide customized job training for employers
           Employers pay 50% of cost of training

     – $250,000 to double the Connecticut Apprenticeship program which
       provides guidance and mentoring for businesses using apprentices
     – $150,000 for the Connecticut Career Resource Network that will provide
       career specific public information to state students, teachers and guidance
       counselors                                                              14
Jobs
• Student Loan Forgiveness Program
    – Encourage students to choose to work in Connecticut’s “high
      need” jobs
    – $3 million program
    – Half of funding ($1.5 million) dedicated to students who become
      math or science teachers
• Economic Impact Statements
    – Assess the economic impact of legislation being considered by
      the General Assembly
    – Prepared by the Office of Fiscal Analysis and included in fiscal
      note


                                                                      15
Energy
• Governor Rell is proposing the creation of a new State
  Department of Energy to serve as a central clearinghouse for
  energy planning, research and oversight
• Made up of new positions and positions transferred from the
  Office of Policy and Management this agency will:
    – Assist the Governor in formulating and implementing a statewide
      energy policy
    – Use its functions to increase efficiency and reduce costs
    – Interact with federal and other state agencies to create a centralized
      energy plan for the State of Connecticut




                                                                       16
Energy
• Governor Rell proposes to restore funding to the Energy
  Conservation and Load Management Fund by eliminating the
  $12 million transfer of earmarked money to the General Fund
    – This Fund will promote long term goals of conservation and
      energy management to improve the state’s fiscal health and our
      quality of life
    – These funds will be available to help consumers and businesses
      undertake conservation measures to help mitigate the dramatic
      increase in energy costs
• State agency expenditures on energy have increased from $51.7
  million in FY 00 to an anticipated number in excess of $100
  million in FY 06. This budget properly funds state agency
  energy expenditures, eliminating a structural hole in the budget
                                                                   17
Energy Tax Relief
• This past year there has been a dramatic increase in all forms of
  energy costs straining the budgets of individuals, businesses, and
  governments
• Governor Rell proposes a 25% across-the-board cut in the state’s
  public utilities tax beginning July 1, 2006 lowering everyone’s
  electric and gas bills, saving businesses and consumers an
  estimated $44.9 million in FY 07
• More than 50% of these savings will benefit Connecticut’s
  businesses
• The Governor is also proposing the extension of the sales tax free
  period on energy efficient residential products until June 30, 2006


                                                                 18
Elimination of the Car Tax
  • Each year in municipalities throughout the state:
      – Assessors spend countless hours creating grand lists of
        motor vehicles
      – Tax collectors send out thousands of bills
      – Taxpayers write out thousands of checks to pay property
        taxes on motor vehicles
  • Only to have the State of Connecticut then give many a
    partial credit for part of the amount that they paid in tax
    in the first place




                                                                  19
Elimination of the Car Tax

• This does not even account for the frustration and
  aggravation that occurs when taxpayers move or a
  car is sold and a glitch in the system or an error on
  the part of either government or an uninformed
  taxpayer causes a bill to go unpaid, preventing
  registration of a motor vehicle
• To say the system is inefficient and somewhat
  circular is quite an understatement




                                                          20
Elimination of the Car Tax
• More than inefficient and circular, the system is patently inequitable
• Currently in Connecticut
     2003 Ford Taurus Wagon 4D SE
     Bridgeport property tax bill            $309
     New Canaan property tax bill            $103
     Difference:                             $206

     A taxpayer in Bridgeport pays a tax bill that is 3 times higher than a taxpayer in New Canaan
     pays for the same car.

     2002 Toyota Camry Sedan 4D SE
     Norwich property tax bill               $292
     Lyme property tax bill                 $138
     Difference:                             $154

     A taxpayer in Norwich pays a tax bill that is slightly more than twice the tax that a taxpayer in
     Lyme pays for the same car.


     2005 Ford Explorer Wagon 4D XLT
     Plymouth property tax bill      $607
     Kent property tax bill          $246
     Difference:                     $361

     A taxpayer in Plymouth pays a tax bill that is nearly 2 ½ times higher than a taxpayer in Kent
     pays for the same car.                                                                              21
Elimination of the Car Tax
• A taxpayer in Greenwich pays $273 in property taxes for a
  2005 Mercedes-Benz Sedan 4D C240 (AWD)
• A taxpayer in Waterbury taxpayer pays $278 in property
  taxes for a 2000 Chevrolet Cavalier L-4 2D Convertible
• Does it make sense for a Greenwich taxpayer to pay $5 less
  in property taxes per year for a new Mercedes than a
  Waterbury taxpayer pays for a 6-year old Chevy?
• Under Governor Rell’s proposal beginning July 2006,
  no Connecticut resident will ever again have to pay this
  inequitable, regressive and frustrating tax



                                                               22
Elimination of the Car Tax
• The program will exempt the property tax due on privately-
  owned Connecticut-registered cars and motorcycles, as well as
  those vehicles that individuals lease on a long-term basis
• This is a bold step to eliminate a regressive tax, which will make
  the State of Connecticut a much more attractive place to live
  while reducing the financial burden on the average working
  family in the State
• Payments of property tax on exempt vehicles would be
  eliminated, beginning with what would be the July 2006 payment.
  The proposal does not include unregistered passenger motor
  vehicles, the registrations of which allow commercial uses or a
  combination of commercial and passenger uses

                                                                  23
Elimination of the Car Tax
• Governor Rell’s proposal provides for a mechanism that
  replaces this municipal revenue stream by transferring to each
  municipality funding necessary to replace the lost revenue
• Moreover, the Governor has constructed a fund using as a basis
  a 100% collection rate though many municipalities,
  particularly the larger cities experience a significantly lower
  collection rate for motor vehicle taxes
• The Governor’s plan relieves the municipalities of a significant
  and unnecessary administrative burden that is greatly
  disproportionate to the tax revenue they receive



                                                                    24
Elimination of the Car Tax
• The Governor proposes to create a Casino Assistance Revenue
  (CAR) grant by intercepting 100% of Indian gaming funds
  received by the State
• In order to fully fund this program, a relatively small portion of
  additional revenue will be temporarily intercepted until the casino
  revenue grows to a point where it pays for 100% of the grant
• This additional intercept would be phased out as casino revenue
  grows. Any additional growth in casino revenue would continue
  to benefit municipalitities proportionate to the original CAR
  grant, thereby providing additional property tax relief in the
  future


                                                                  25
Elimination of the Car Tax
• This program is affordable due to the combination of natural
  revenue growth exceeding controlled spending and the
  elimination of the property tax credit on the personal income
  tax which this fiscal year provides no more than $350 in relief
  per household and next year, no more than $400
• This redirecting of the current property tax credit contributes
  $325 million of revenue in FY 07
• The vast majority of taxpayers will benefit significantly from
  this program because the total amount of tax relief included in
  this program is over 50% greater than that was encompassed
  by the prior property tax credit program


                                                                    26
Elimination of the Car Tax

• The per municipality CAR grant in the “Estimates of
 State Formula Aid to Municipalities” will be adjusted
 based upon data consistent with the legislation
• The original Mashantucket Pequot and Mohegan
 Fund grant will be maintained but transferred to the
 General Fund in its entirety and renamed
 Supplemental Municipal Aid grant with no loss to
 any town including host towns




                                                        27
 The Estate Tax
• Under the legislation passed last year, an increase
  of $1.00 in the value of an estate can result in a
  $99,600 increase in tax liability. Governor Rell
  provides for an immediate elimination of this so        Estate Tax
  called cliff                                            Phase-Out
                                                           (in millions)
• Governor Rell proposes an immediate doubling of
  the amount of an estate that is exempt from the       Income   Exemption
  estate and gift tax from $2 million to $4.1 million     Year     Level
                                                          2005    $   2.0
• Under the Governor’s plan, the estate tax would be      2006    $   4.1
  phased out until it is completely eliminated by         2007    $   5.1
  2010                                                    2008    $   7.1
                                                          2009    $ 10.1
• Governor Rell’s plan will make us competitive           2010    No Tax
  with such taxpayer friendly states like Florida,
  South Carolina and Arizona, where many of our
  retired citizens relocate in order to protect their
  estates for the benefit of their loved ones
                                                                           28
Public Safety
• Combating Urban Violence
    – Division of Criminal Justice - $400,000 for 6 additional staff to utilize a
      vertical prosecution strategy
    – Department of Public Safety - $520,000 to create a state/municipal Urban
      Violence Task Force
    – Office of Policy and Management - $4.25 million for grants to
      municipalities to provide alternative activities for young people in urban
      areas
    – Health and Human Services – initiatives for career-based mentoring and
      new community diversion boards
    – Juvenile Justice Programs (Judicial Branch) - $1.94 million to support 12
      residential beds and 449 slots for juveniles with specific program needs
    – Statewide Narcotics Task Force - $239,000 to continue the previously
      federally funded program of stipends for municipalities

                                                                             29
Public Safety

                   URBAN VIOLENCE INITIATIVE
                                                                 FY 2007
     Division of Criminal Justice
     Racketeering & Continuing Criminal Activities Unit      $     400,000

     Department of Public Safety
     State and Municipal Urban Violence Task Force           $     520,000

     Office of Policy & Management
     Municipal Violent Criminal Activity Prevention Grant    $    4,250,000

     Department of Mental Health and Addiction Services
     Career-based Mentoring for High Risk Inner City Youth   $     200,000

     Department of Children and Family Services
     New Community Diversion Boards                          $     550,000


     TOTAL URBAN VIOLENCE INITIATIVE                         $    5,920,000



                                                                              30
Public Safety
• Tougher Penalties/Monitoring of Sex Offenders
    – Increased minimum mandatory sentencing for individuals convicted
      of certain sex crimes against children 13 and younger
    – $1.3 million to the Court Support Services Division program for 15
      new probation officers and lease of 250 GPS units to monitor high-
      risk offenders
    – $197,000 to the Department of Correction for 2 additional parole
      officers and 30 GPS units
• Criminal Justice Information System (CJIS)
    – $2.3 million in CJIS operating funding
    – $485,000 for the Offender Based Tracking System to transition
      from consultants to state IT personnel
    – $1 million for the Connecticut On-Line Law Enforcement
      Communications Teleprocessing for upgrade and operating costs
                                                                   31
Public Safety
• Regional Fire Training Schools
    – An additional, $10 million in bonding for construction, renovation,
      acquisition and upgrading of these training facilities
• Department of Motor Vehicles
    – $17 million in bonding for improvements to information systems
    – $400,000 for commercial vehicle safety inspectors
    – $600,000 to upgrade or add security measures to prevent fraud
      involving issuance of licenses
    – $730,000 to increase customer convenience through branch office
      expansions




                                                                      32
Public Safety
• Other Initiatives
    – $100,000 to create a Child Protection Registry
    – Funding for 6 positions to conduct criminal background checks on
      individuals and provide for registration of agencies providing
      homemaker companion services to the elderly/disabled
    – Maintenance of support for the new Criminal Justice Planning
      Division within OPM
    – $258,000 for 5 positions and the cost of kits to undertake collection,
      analysis and registry of DNA samples from all individuals
      convicted of a felony or misdemeanor
    – Funding of $150,000 to eliminate the significant backlog of
      criminal fingerprint cards, which will, in turn, reduce outstanding
      applicant background checks

                                                                       33
   Education
• Job retention and creation is a pressing state goal
• Tomorrow’s workers must have the education they and the state’s
  economy need to succeed
• Academic achievement gap between advantaged/disadvantaged
  students must be eliminated
• Governor Rell believes quality preschool education programs are
  critical to eliminating that gap and proposes:
    – Increasing the number of inner city children in preschool by 500 from
      7,000 to 7,500
    – Including $4 million to increase the per child School Readiness slot
      subsidy from $7,750 to $8,025
    – Including $400,000 in scholarship funding for preschool workers
    – Adding funding for 5 towns to add preschool programs

                                                                       34
Education
• Governor’s budget also provides $400,000 to create a readiness
  tool to assess the academic, social and developmental skills
  necessary for children to succeed in kindergarten
• For Charter Schools, Governor Rell is recommending:
    – $1.7 million for the expansion of seats in those schools with natural
      grade growth
    – In schools with more than 6 grades, increasing the enrollment
      ceiling from 300 to 400 thereby allowing for some 215 additional
      urban students to participate
• To create a clear education financing strategy, the Governor has
  appointed a Commission on Education Finance that will
  recommend ways to improve how the state finances its education
  programs
                                                                       35
 Continuing Our Commitment to Connecticut’s Neediest
 Citizens

• Meeting the Needs of
  DMR Clients                                        Department of Mental Retardation Caseloads
                                                                 and Expenditures
    – Continue the wait list                       $900                                                                                                      22
                                                   $850
      Initiative with $12.7                                                                                                                                  21




                               Expenditures ($M)
                                                   $800




                                                                                                                                                                  Caseload (Thsd)
                                                                                                                                                             20
                                                   $750
      million in FY 07                             $700                                                                                                      19

      allowing 150 new                             $650
                                                   $600
                                                                                                                                                             18
                                                                                                                                                             17
      clients to be served




                                                          $514.0
                                                                   $540.0
                                                                            $579.0
                                                                                     $627.0
                                                                                              $655.0

                                                                                                       $701.0
                                                                                                                $719.3

                                                                                                                         $718.9
                                                                                                                                  $754.5
                                                                                                                                           $818.9
                                                                                                                                                    $863.4
                                                   $550
                                                   $500                                                                                                      16

    – Provide an additional                        $450
                                                          '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07
                                                                                                                                                             15


      $2.1 million for day                                                 Fiscal Year
                                                                                                 Fcst.
                                                                                             Est..


      and residential                                         Net Expenditures                                                             Caseload

      programs for high
      school graduates and
      age-outs

                                                                                                                                                                              36
Continuing Our Commitment to Connecticut’s Neediest
Citizens


 • Investing in Behavioral Health
     – Continue to implement the Behavioral Health
       Partnership between DCF and DSS to reduce service
       system fragmentation and implement more community-
       based programs
     – Maintain funding for the Next Steps Initiative to
       expand supportive housing by 500 units to create
       stability for vulnerable populations and decrease their
       use of acute and expensive services




                                                                 37
Continuing Our Commitment to Connecticut’s Neediest
Citizens
• Investing in Behavioral Health
    – Fund Adult Mental Health Initiatives
          Continue $5 million in funding for many new mental health
           community initiatives begun in FY 06
          Add $4 million to include Assertive Community Treatment
           teams and community support services under Medicaid
          Provide $2.1 million to serve 3.3% more clients in General
           Assistance Managed Care
          Add $400,000 for a Transitional Case Management Program for
           released offenders with substance abuse disorders
          Provide funding to develop and implement a client information
           system including $4.7 million in bond funds and 2 positions



                                                                           38
Continuing Our Commitment to Connecticut’s Neediest
Citizens
• Rate increases for long-term care facilities, residential care
  homes and private providers
    – Provide $19.1 million to increase rates by 2% for nursing
      homes, Intermediate Care Facilities for the Mentally
      Retarded and Residential Care Homes effective October 1,
      2006
    – Provide $17.1 million in funding for a 2% private provider
      increase effective October 1, 2006
    – Combined with last year’s initiative, Governor Rell’s
      proposal represents an unprecedented 6% increase for these
      dedicated providers within a 15 month period




                                                                   39
Continuing Our Commitment to Connecticut’s Neediest
Citizens
• Maximizing the Use of State Dollars
   – Provide $500,000 to implement a Premium Assistance
     program to help HUSKY A families access health
     insurance from their employers and save $5 million in
     FY 08
   – Continue to implement Medicare Part D including a
     ConnPACE wraparound, covering copays for the dually
     eligible, covering drugs not covered under Part D, and
     paying $139 million clawback in FY 07
   – Provide $225,000 to replace federal grant for the
     Nurturing Family Network, allowing state to claim $2.6
     million in Medicaid reimbursement in FY 07

                                                              40
Continuing Our Commitment to Connecticut’s Neediest
Citizens
• Focus on Prevention
   – Provide additional $1.9 million in FY 07 for immunizations,
     including the vaccination of children against
     Meningococcus and a new vaccine for immunization of
     adolescents against Pertussis
   – Provide additional $155,000 to support increased costs for
     newborn screening activities incurred by DPH and $124,000
     for additional referrals to genetic disease counselors in FY
     07
   – Provide funding for two new HUSKY children’s dental
     initiatives in FY 07, including $1.85 million for
     pediatricians to apply fluoride and $1.1 million to add
     premolar sealants as a Medicaid covered service
   – Provide additional $500,000 to the Elderly Nutrition
     Program to offset federal reduction and address increased
     costs and rising demand
                                                                    41
Serving Connecticut’s Children
• The Juan F Consent Decree
    – To continue the progress that has been made under the
      consent decree additional funding is provided for abused
      and neglected children, including the development of new
      group homes with 155 new beds in FY 06 and 91 new beds
      in FY 07
    – Funds are provided for DCF to restructure their emergency
      shelter services into smaller community based assessment
      centers to provide more clinically appropriate services
    – Funding is provided to initiate a new program of intensive
      family reunification to prevent extensive foster care
      placement, expedite family reunification and provide better
      outcomes for families
    – Additional funds of $500,000 are provided to increase
      intensive in-home services beyond the $600,000 increase
      already in the budget for FY 07
                                                                    42
Serving Connecticut’s Children

• The Emily J Settlement Agreement
   – Provide an additional $3.5 million to DCF to
     expand the Hartford based programs statewide,
     bringing the total state commitment to the Emily
     J. settlement agreement in DCF to just over $6
     million
   – In the Judicial Branch, the Governor’s budget
     includes $1.84 million to improve mental health
     services both in the girls’ detention facilities and
     alternatives to detention community-based
     facilities


                                                            43
Serving Connecticut’s Children
• Other Improvements to the Juvenile Justice System
    – Funding is provided for new programs to serve girls involved in the
      juvenile justice system
             Develop a small, self-contained, secure state-run facility to
              serve the most troubled girls including $1 million bond
              funds
             Develop 3 new group homes to serve 4-6 girls each
             Develop 12 new Specialized Treatment Foster Care slots
    – Funds are provided in the Judicial Branch to continue 3 federally
      funded programs with state dollars including: two 6-bed programs
      for a Court Diversion Initiative for Girls; 225 slots for Multi-
      Systemic Therapy for juvenile offenders; and 224 slots in Juvenile
      Risk Reduction Centers
    – $5 million in bond funds to initiate the planning and acquisition of
      new Treatment, Reintegration and Education (TREC) centers to
      replace CJTS
                                                                              44
Valuing Our Environment
• Governor Rell is continuing her
  commitment to preserve and
                                                     Bond Authorizations for State Parks
  enhance our environment and to                        and Open Space Acquisition

  maintain our state parks                     $30
                                                           State Parks                 Open Space



• Enacted FY 07 budget includes
                                               $20
  $15 million in bond funds to




                                    Millions
  repair and enhance our state                 $10
  parks and $10 million in bond
  funds to preserve open space                  $0
                                                     '03        '04          '05       '06     '07
• Governor Rell is proposing to                                          Fiscal Year

  establish the Connecticut State
  Park Foundation in order to
  facilitate the creation of
  public/private partnerships to
  support the state park system                                                                      45
Valuing Our Environment
• To further enhance and protect Long Island Sound and our lakes
  and rivers $100 million in revenue bonds and $20 million in
  general obligation bonds through the Clean Water Fund are
  available in FY 07
• Following Governor Rell’s recommendation in January 2006,
  the State Bond Commission allocated $87 million in Clean
  Water Funds – the largest single commitment in four years
                                Clean Water Fund Bond Allocations
                                      ( C o m b i n e d R e v e n u e a n d GO)




                             $120
                  Millions




                             $80
                             $40
                              $0
                                    '03           '04             '05             '06    '07-
                                                                                        Fcst.
                                                          Fiscal Year
                                                                                                46
Capital Investments
 • Governor Rell is committed to investing bond funds in
   key areas and staying well below Connecticut’s 90%
   statutory bond limit
 • Governor Rell is recommending:
     – An increase of $130.7 million in General Obligation (GO)
       Bond authorizations in addition to those already enacted
       by the General Assembly for a total of $1.43 billion GO
       bond authorizations for FY 07
     – An increase of $70 million in Special Tax Obligation
       Bonds




                                                                  47
Capital Investments
• Proposed additional General Obligation Bond authorizations
  include:
    – Regional Fire Training Schools - $10 million
    – Remedial improvements at York Correctional Institution (Niantic)
      $25 million
    – Upgrade of DMV information systems - $17 million
    – Recapitalization of programs under new Connecticut Finance
      Collaborative - $25 million
    – Planning and acquisition of new Treatment, Reintegration and Education
      Centers (TREC) - $5 million
    – Developing a Hospital Information System for DMHAS - $4.7 million
    – Consolidated campus for Three Rivers Community College
      $3.8 million
    – Small, secure facility for girls in Juvenile Justice System - $1 million
                                                                                 48
Capital Investments
• Total General Obligation Bond Authorizations for FY 07 include
• Investing in Education
    – Local School Construction - $675 million, represents almost half
      of all GO authorizations for FY 07
    – Community Technical College System - $101.7 million (includes
      an additional $3.8 million over previous FY 07 authorizations)
    – Connecticut State University System - $131.2 million
• Total education-related authorizations are $921 million or 64% of
  total GO authorizations for FY 07




                                                                    49
Capital Investments
• Total General Obligation Bond Authorizations for FY 2006-
  07 also include:
    – Small Town Economic Assistance Program (STEAP) - $20
      million
    – Open Space Preservation - $10 million
    – Farmland Preservation - $10 million
    – State Park improvements - $15 million
    – Housing Trust Fund - $20 million
    – Clean Water Fund - $20 million
    – Clean Water Fund will also include revenue bond
      authorizations of $100 million


                                                              50
    Municipal Aid
•   Under Governor Rell’s proposal, municipal aid will increase an
    unprecedented 30% from FY 05 to FY 07
                     SUMMARY OF ESTIMATED FORMULA GRANTS TO
                                 MUNICIPALITIES
                                                                      Estimated      Recomm.
                                                          Fiscal        Fiscal        Fiscal
                                                          2005          2006           2007
                       Grant Program                                 $In Millions
                State-Owned PILOT                             72.5           77.9        78.1
                College & Hospital PILOT                     105.9          111.2       111.2
                Supplemental Municipal Aid *                  85.0           86.3        91.1
                Town Aid Road Grant                           20.0           28.0        28.0
                LoCIP                                         30.0           30.0        30.0
                Miscellaneous General                         19.1           19.3        20.8
                Machinery & Equipment                         50.7           52.8        53.9
                Casino Assistance Revenue Grant                0.0             0.0      496.8

                Sub-total - General Government               383.2          405.5       909.9

                Public School Transportation                  43.1           48.0        48.0
                Non-Public School Transportation               3.3            4.0         4.0
                Adult Education                               16.9           19.6        19.6
                Education Cost Sharing                     1,563.0        1,619.5     1,626.5
                Magnet Schools                                67.9           85.5        95.4
                Special Education - Student Based             67.1           88.8        90.6
                Special Education - Equity                     0.0            3.0         0.0
                Miscellaneous Education Grants               122.5          133.0       142.5

                Sub-total - Education                      1,883.8        2,001.4     2,026.6

                Total - Formula Grants                  2,267.0        2,406.9 2,936.5

                * formerly known as the Mashantucket Pequot and Mohegan Fund Grant              51
Municipal Aid
• Governor Rell proposes to increase aid for public education
  by $25 million including:
    – $4 million for the Governor’s Early Childhood Initiative to
      increase the number of preschool slots for the state’s neediest
      youngsters
    – $9.9 million for magnet schools
    – $2.5 million for the OPEN Choice voluntary school choice
      program
• In addition, after years of capped and limited growth, the
  State’s education grants are projected to grow in FY 07, about
  7.6% over education grant spending in FY 05


                                                                        52
Conclusion
• Building Connecticut’s future requires leadership. Leadership
  requires vision, responsibility and discipline
• To make sure that Connecticut remains economically
  competitive, we must create a climate that is conducive to job
  growth and life-long learning
• At the same time, we need to invest in environmental
  enhancements and provide for the neediest of our citizens
• Providing meaningful, equitable and immediate tax relief for
  virtually every taxpayer in the state
• We must begin building Connecticut’s future today


                                                                   53

				
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