WYMAN SAYS BUDGET SURPLUS WILL REACH $300
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State Comptroller Nancy Wyman today estimated that the state's year-end budget surplus will climb over $300 million for the first time in more than a decade, and urged lawmakers to use the money for taxpayer rebates and to secure Connecticut's fiscal stability.
The projected General Fund surplus of $303 million continues to be fueled by a strong economy that is producing low unemployment and extraordinarily high revenues from the state income tax. Wyman estimated that the state will take in about $3.5 billion from the income tax this fiscal year, or nearly $380 million more than was originally expected.
Wyman has proposed using the surplus to issue rebates to taxpayers, fill the state's Rainy Day Fund and pay down some of the state's debt. She said her plan is a permanent and more direct form of relief for taxpayers than other tax-cutting proposals now being considered by the legislature, including an additional two-cent-per-gallon reduction in the gasoline tax.
Wyman said further cuts in the gasoline tax would put little money back in taxpayers' pockets, but could drain the state's Transportation Fund, which is used to pay for improvements to the state's roads and bridges. If depleted, the fund would have to be replenished by money taken from the General Fund.
"This type of shell game will ultimately compromise the financial integrity of both funds when the economy and revenue growth slow down," Wyman said. ``We should be using the surplus to strengthen our overall fiscal position, not to possibly weaken it."
Wyman also expressed concern that much of the current surplus may be used by the legislature to fund ongoing state programs, rather than for tax relief or to address Connecticut's long-term fiscal stability. She cautioned that spending the surplus on programs could lead to future tax increases.
The last time the surplus grew larger than $300 million was in the 1986-87 fiscal year, when it reached $388 million. Wyman noted that overspending and tax cuts made during those good economic times led to subsequent budget deficits when the economy declined, prompting passage of the income tax in 1991.
"We have an obligation not to squander this surplus and put our taxpayers back on a roller-coaster ride of tax cuts and tax increases," Wyman said. ``This surplus was built by our taxpayers and they deserve to get most of that money back in rebate checks."
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For Immediate Release
April 1, 1998
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