|STATE OF CONNECTICUT|
THE STATE COMPTROLLER
January 10, 2006
The Honorable M. Jodi Rell
Governor of the State of Connecticut
Dear Governor Rell:
I write to provide you with the Annual Report of the State Comptroller for Fiscal Year 2004. The statements have been prepared on the budgetary, modified cash basis of accounting as detailed on the inside front cover of this report.
The General Fund ended Fiscal Year 2004 with a surplus of $302,155,301. The ending balance in the Transportation Fund for Fiscal Year 2004 was $129,271,828. The entire General Fund surplus For Fiscal Year 2004 was transferred into the Budget Reserve Fund in accordance with Connecticut General Statutes, Section 4-30a. Prior to this deposit, the Budget Reserve Fund had been completely depleted.
The General Fund surplus for Fiscal Year 2004 would have been higher absent provisions of Public Act 04-216 that increased appropriations and transferred revenue. Section 48 of Public Act 04-216 increased General Fund appropriations by $112.4 million (beyond the amount required to cover normal operating deficiencies) to fund education grants, Husky health coverage, contract settlements, and other miscellaneous items. Section 10 of Public Act 04-216 reserved $125.3 million of Fiscal Year 2004 revenue to cover Fiscal Year 2005 spending.
Between Fiscal Years 2003 and 2004, General Fund expenditures grew by $336.6 million or 2.8 percent. In most functional areas as detailed on Schedule B-3, expenditures declined or grew at historically low rates between 2003 and 2004. The modest growth in spending is largely attributable to the annualized impact of deficit reduction initiatives implemented in Fiscal Year 2003. Transportation Fund expenditures grew by just $1.1 million in Fiscal Year 2004.
General Fund revenues in Fiscal Year 2004 increased by $1.1 billion or 9.2 percent from the prior year. Almost two-thirds of the revenue increase is attributable to the income tax, which experienced growth of 16 percent from the last fiscal year. In Fiscal Year 2004, Transportation Fund revenue increased $76.8 million or 9.3 percent.
Revenue enhancements enacted in 2003 added over half a billion dollars in Fiscal Year 2004 revenue. Moderate economic growth explains the remaining increase in Fiscal Year 2004 receipts and the resulting budget surplus. In Fiscal Year 2004, Connecticut added 6,800 payroll jobs. Personal income in the state increased by 6.8 percent in 2004 from the prior year, and for the same period, Gross Domestic Product rose 4.2 percent.
The Transportation Fund ended Fiscal Year 2004 with a positive balance of $129,271,828. This is a reduction of $3,767,373 from the Fiscal Year 2003 ending balance of $132,948,201. The reduction in fund balance in Fiscal Year 2004 is primarily attributable to the carry forward of Transportation Fund resources to Fiscal Year 2005.
I would be happy to discuss any information contained in this report with you at your convenience.