WYMAN ANNOUNCES YEAR-END SURPLUS OF $69.3 MILLION, CALLS FOR STATE TO ADOPT PERFORMANCE-BASED BUDGETING
|Contact: Steve Jensen|
Although Connecticut experienced exceptional revenue growth in 1999, historically high state spending consumed most of the revenue windfall and left the state with a final year-end budget surplus of $69.3 million, State Comptroller Nancy Wyman said today.
The $69.3 million surplus is the smallest surplus as a percentage of spending posted since 1994.
Spending increased dramatically in 1999, rising 6.2% above the prior year, Wyman said. This growth rate is almost three times higher than the general rate of inflation, and in dollar terms it rivals the high budget growth experienced in the late 1980s.
A strong economy and capital gains in the financial markets provided the tax revenue boost that was necessary to sustain the high level of spending. The income tax alone delivered almost 70% of the windfall.
"The state should not continue to rely on exceptional tax receipts to compensate for a lack of budget discipline," Wyman said. "I renew my call for the state to upgrade its financial management information systems and to introduce real performance budgeting controls. The current financial management systems are more than a decade old and do not provide all of the accounting data necessary for managers and policy makers to effectively control costs."
Even if the savings from improved fiscal management amount to one half of one percent of current spending, Wyman said, that would accumulate to over a quarter billion dollar savings to taxpayers within five years.
Spending exceeded budget targets by $572.6 million. This single year's excess spending is more than the total multi-year accumulation in the state's emergency Rainy Day Fnd.
For the second consecutive year, expenditures exceeded the limits of the constitutional spending cap, requiring a declaration of "extraordinary circumstances" by the governor.
In addition to the budget growth, debt was increased by $340.4 million during the fiscal year.
Current projections for Fiscal Year 2000 show that an anticipated General Fund surplus of $64.5 million has already declined to just $12 million.
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For Immediate Release
September 1, 1999
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