Seal of the  State of Connecticut, Office of the State Comptroller

STATE OF CONNECTICUT

NANCY WYMAN
COMPTROLLER

OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775

MARK OJAKIAN
DEPUTY COMPTROLLER

COMPTROLLER WYMAN PROJECTS $208.7 MILLION SURPLUS
Contact: Steve Jensen
860-702-3308

State Comptroller Nancy Wyman today said a surge in collections of the income tax should produce a budget surplus of $208.7 million by the end of the 2004 fiscal year on June 30.

Wyman cautioned, however, that the spike in tax receipts appears to be based on recently-improved financial market activity rather than gains in employment or business growth. Therefore, she said, the General Assembly should have deposited a significant amount of the surplus into the state's Rainy Day Fund.

The budget approved by the legislature last week and awaiting action by the Governor calls for about $250,000 of the surplus to be set aside in the Rainy Day Fund. The fund had reached $590 million before it was emptied two years ago to deal with a budget deficit.

"I am disappointed that such a trivial portion of the current surplus has been earmarked for the Rainy Day Fund," Wyman said. "I believe the most important fiscal lesson of the last few years is that state government needs to better prepare for inevitable economic downturns."

The bulk of the estimated $208.7 million surplus is attributed to tax payments on non-wage income such as capital gains and dividends related to the financial markets, Wyman said. Meanwhile, she said, Connecticut continues to lose jobs and business growth is flat.

Payroll employment fell by 2,200 jobs between February and March, bringing total job losses for the fiscal year to about 3,900. Collection of taxes paid by corporations based on profits also are down about $113 million from budgeted estimates.

Wyman also noted that the projected $208.7 million surplus would have been close to $280 million if not for an appropriation of about $71 million to cover state agency deficiencies and other unbudgeted expenses.

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

Learn more about the Connecticut Comptroller's Office by calling up our Internet Home Page, at the link below.

For Immediate Release
May 3, 2004

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