STATE OF CONNECTICUT
THE STATE COMPTROLLER
|COMPTROLLER WYMAN SAYS SURPLUS REMAINS
STEADY AT $150 MILLION
Renews Call to Use Surplus to Address $21 Billion Retiree Health Care Liability
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today projected the state will end the 2008 fiscal year with a budget surplus of $150 million.
Wyman's estimate is unchanged from last month, as the economy continues to produce mixed results and overall modest growth. The surplus is mostly due to an increase in wages which has sparked growth in collections of the income tax.
In her monthly letter to the Governor, Wyman also said she will renew her proposal of last year calling for a portion of the surplus to be earmarked to reduce the state's $21 billion unfunded liability for state retirees' health insurance. Connecticut has the largest per-capita unpaid retiree health insurance bill of any state in the nation at $6,186 for every resident.
The liability currently requires annual payments of approximately $1.6 billion. Wyman's proposal calls for an initial contribution of $100 million of surplus followed by contributions of a fixed percentage of any future surpluses. If this recommendation had passed last year, the liability would have been lowered by $5 billion and annual contributions would have been cut by over $300 million.
"These are significant state savings as we enter difficult budget years,"
Wyman said. "Implementing this common-sense solution will reduce pressure on the
state's bond rating and significantly lessen the need for tax increases to fund
this liability moving forward."
Wyman said that state and national economic indicators point to a slowing economy at risk for further contraction in the second half of fiscal 2008. In the first five months of the fiscal year, the state added 3,100 payroll jobs - 900 fewer jobs than at the same point last year. Advance retail sales for November were up a strong 6.3 percent from last year, but those results are offset by early indications of very weak December sales.
Corporate profits are well off the double-digit growth rates of the past several years. Existing home sales in Connecticut have been weak, falling by almost 10 percent in the third quarter.
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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