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WYMAN CREDITS STRONG NATIONAL ECONOMY, STATE INCOME TAX FOR PROJECTED $416 MILLION SURPLUS

Contact: Steve Jensen
860-702-3306/3301

State Comptroller Nancy Wyman today projected that the state will end the fiscal year with a budget surplus of $416 million, which she attributed to very strong income tax receipts produced by a national economy that continues to perform beyond expectations.

The income tax is expected to generate $429.8 million more than original budget estimates, Wyman said. December's receipts were the highest monthly collection of the fiscal year to date, she said, mainly due to strong seasonal employment gains and the continued strength of Wall Street.

"The national economy is growing at a rate well beyond expectations and that translates into higher income tax receipts for Connecticut," Wyman said. "This $416 million surplus is being built by tax revenue, not government efficiency."

Wyman said the extraordinary revenue being produced by the income tax is compensating for continued overspending by the state. Spending this year is expected to exceed the constitutional spending cap by $56.8 million, mostly due to an $80 million appropriation for a new sports stadium in Hartford.

In addition to higher spending, anticipated budget savings also have been reduced by about $24.2 million. The overall savings reduction results mainly from a recognition by the state Office of Policy and Management that an expected $50 million savings associated with a plan to privatize the state's computer functions will not occur this fiscal year.

That $50 million loss, Wyman said, is partially offset by less spending in other program areas.

Wyman, the state's chief fiscal guardian, issues a monthly surplus projection to the Governor's office. Her annual report on the state's fiscal health will be published Wednesday, Feb. 3.

The State Comptroller appreciates input on this and other issues from residents of the state. Please feel free to contact her office by phone - (860) 702-3300; mail - OSC, 55 Elm Street, Hartford, CT 06106; or, via E-mail - osc.opinions@po.state.ct.us

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For Immediate Release
January 28, 1999

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