CT SB01135

Establishes a Budget Reserve Fund and Restricted Grants Fund to manage revenue volatility by transferring surplus General Fund revenue based on personal income tax and corporation business tax projections made on January 15 and April 30 annually.

Increases the Budget Reserve Fund cap from 10% to 15% of net General Fund appropriations, with tiered transfers to the State Employees Retirement Fund (5-15% of deposits depending on fund balance level) once the cap is reached.

Creates a formula for calculating the threshold level for deposits to the Budget Reserve Fund based on a ten-year average of combined revenue and historical revenue volatility, with adjustments for major tax law changes.

Allows the Governor to transfer funds from the Restricted Grants Fund back to the General Fund if a projected deficit exceeds 1% of General Fund appropriations, and permits General Assembly transfers from the Budget Reserve Fund if revenues decline by 2% or more.

Requires fiscal notes on bills affecting personal income tax or corporation business tax to identify impacts on Budget Reserve Fund deposits, and mandates reports every five years on the formula's effectiveness starting December 15, 2020.