STATE OF CONNECTICUT
THE STATE COMPTROLLER
|WYMAN PROJECTS $400.4 MILLION BUDGET
Comptroller Says Income Tax, Capital Gains Driving Strong Revenues
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today projected that the state will end the 2001 fiscal year with a budget surplus of $400.4 million, driven by strong revenues from the income tax and capital gains associated with the financial markets.
"This surplus is being created by revenues from our taxpayers, not by lower state spending," Wyman said. "Spending control continues to be an elusive goal for state government."
Wyman noted that because Connecticut residents are heavily invested in the financial markets, stock market volatility can cause significant swings in state revenues. Over the past five years the swings have been upward, but that trend cannot be sustained indefinitely, she said.
Last fiscal year, the capital gains portion of the income tax produced about $500 million of the $4.2 billion in total income tax receipts. Erratic financial market performance in 2000, however, has raised concerns about the stability of this revenue source.
Total revenues are projected to end the current year $537.8 million over budget projections. Other revenues outperforming expectations are the sales tax, which is expected to end the year $83.3 million over budget, and the corporation tax, which is projected at $47.1 million over budget.
Current estimates show that the constitutional cap on spending will be exceeded for the fourth straight year.
Agency overspending currently totals $168.4 million. The majority of excess spending is in the Department of Social Services, and is attributed to higher medical and prescription drug costs and interim nursing home rate increases.
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 - firstname.lastname@example.org
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