STATE OF CONNECTICUT
THE STATE COMPTROLLER
WYMAN PROJECTS $601.6 MILLION SURPLUS, SAYS
SPENDING CAP FLAWS COULD COST STATE MILLIONS
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today projected a year-end budget surplus of $601.6 million, and said the state could lose millions of dollars in federal aid because of flaws in the constitutional cap on spending.
Wyman said a proposal in the current biennial budget deliberations to refinance $200 million in annual hospital assistance in order to keep the budget below the cap could lead to a net loss of up to $50 million in federal reimbursement. The current definition of the cap could also sacrifice future federal aid for programs such as Medicaid, prescription drug assistance and special education, she said.
"There is an obvious problem here that goes beyond party lines," Wyman said. "The cap is being violated under anybody's math and the losers in this political battle are the taxpayers."
One remedy, Wyman said, would be to redefine the cap so that federal reimbursement of state appropriations are not subject to the cap's limits. Connecticut ranks last in the nation for the amount of federal aid received when compared with tax dollars paid to the federal government.
"The cap was designed to prevent government from growing too large, not to block federal aid that can benefit Connecticut's taxpayers," she said.
Wyman's estimate of a $601.6 surplus for the 2001 fiscal year matches her April projection. She said the capital gains portion of the income tax - paid when taxpayers take profits on sales of stocks - continues to be the driving force behind the surplus.
Total income tax revenues are expected to exceed $4.7 billion this fiscal year.
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 - email@example.com
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