Comptroller Criticizes Governor for Surplus Spending Proposal
|Contact: Bob King|
|860-703-3311 or 860-702-3300|
In her monthly letter on state finances, State Comptroller Nancy Wyman criticizes Gov. John Rowland for proposing to use a one-time state surplus "to advance permanent changes in the state's revenue base."
"The proposal will create long-term structural state deficits including, according to the governor's own projections, a $163 million deficit in fiscal 1999-2000," Wyman said.
Converting nearly all of the expected surplus, projected by Comptroller Wyman at $120 for the year ending June 30, into spending or postponed revenue also means that the funds will not be available to deposit into the Budget Reserve, or "rainy-day," fund, Wyman added. "The governor recently noted in his own budget submission that 'the importance of these Budget Reserve Fund deposits cannot be overstated,'" Wyman said. "He's right, and I think the state's bond rating agencies would agree. Our economy is improving but we can't say with certainty that these good times will last forever."
Rowland plans to use $30.4 million of this year's surplus to pay one month's capitated Medicaid cost that would normally be paid in the upcoming fiscal year. He also announced that the state would pay out $34.9 million in accrued sick and vacation leave liabilities in relation to an early retirement plan that has not been approved. And he would move revenue, budgeted by law for the current fiscal year, from sales of loan assets to the Connecticut Housing Finance Authority, into fiscal 1998-99.
Because final agreements have not been reached on any aspects of the governor's budget proposal, Wyman continues in her letter to project a general fund surplus of $120 million for the year ending June 30. This surplus comes despite general fund spending projected to be $117.9 million higher than budgeted, mostly from Medicaid ($47.4 million over budget) and Foster and Residential Care for Children under the Department of Children and Families ($9.6 million and $17.5 million over budget respectively).
On the ledger's revenue side, both the personal income tax and the sales tax are projected to outperform budgeted figures, by $185.2 million and $60.1 million, respectively. Wyman said this is a healthy sign of the state's economic resurgence.
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For Immediate Release
February 28, 1997
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