STATE OF CONNECTICUT
THE STATE COMPTROLLER
WYMAN SAYS STATE SHOULD END FISCAL YEAR WITH MODEST SURPLUS
Comptroller Cautions That Deficit Appears Likely in 2009
|For Immediate Release||Contact: Steve Jensen|
|August 1, 2008||860-702-3308/3301|
State Comptroller Nancy Wyman today said the state should end the 2008 fiscal year with a modest budget surplus, mainly driven by tax revenues that are slightly outpacing projections despite the erratic economy.
But Wyman also said that the $22.3 million surplus estimated by the Governor's budget office was partially due to the administration's decision to apply unspent budget allocations toward ongoing expenses.
In her monthly report to the Governor, Wyman said the $22.3 million surplus estimate "appears reasonable," but noted that it is only about one-tenth of one-percent of the total $17.6 billion budget. That estimate could change significantly, Wyman said, if the administration again decides to shift unspent funds.
"In the context of the overall state budget, there is a razor-thin margin between surplus and deficit right now," Wyman said.
Wyman also noted that the final bottom line is affected by certain tax revenues that are collected through August, although the fiscal year closes on June 30. In 2007, collection of those taxes increased the surplus by more than $20 million between August and September, when the final surplus or deficit amount figure is determined.
Despite poor economic indicators and weak net job growth of 5,900 positions in the 2008 fiscal year, tax revenues have increased by nearly four percent. Government spending, meanwhile, grew by nearly nine percent, mainly due to the use of surplus funds from 2007.
The administration's decision to apply $33.2 million in unspent 2008 funds toward ongoing expenses prevented those funds from being "carried forward" to the 2009 budget year, now projected to end with a $150 million deficit."From a long-term fiscal perspective, shifting those funds to create a surplus this year only serves to increase the deficit projected for next year," Wyman said.
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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