STATE OF CONNECTICUT
THE STATE COMPTROLLER
WYMAN PROPOSES BILLS TO PROTECT TAXPAYERS, STATE
SERVICES IN ECONOMIC DOWNTURNS
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today proposed two fiscal initiatives designed to lessen the impact of economic downturns on taxpayers and state services.
Wyman's proposals, aired at a General Assembly hearing before the Appropriations Committee, would:
"The unprecedented budget crisis Connecticut is now facing has spotlighted the vital importance of planning for economic downturns that are both cyclical and inevitable," Wyman testified. "These proposals are intended to equip government with conservative, long-term fiscal policies that will lessen the impact of temporary revenue shortfalls on state programs and our taxpayers."
Wyman's first proposal, Raised Senate Bill 1124: "An Act Increasing The Amount Of Unappropriated Surplus Deposited In The Budget Reserve Fund," would raise the cap on the Rainy Day Fund from 10 percent to 15 percent of the annual state budget, which totals $18.4 billion for fiscal 2009. Over the past five years, Wyman has convinced the legislature to raise the cap from 5 percent to 7.5 percent, and again to the 10 percent level where it stands today.
The $1.4 billion currently in the fund - representing about 8 percent of the budget - will likely be drained within the next two years in order to address projected deficits totaling more than $8 billion, Wyman said. A 15 percent fund under Connecticut's current budget would have created a balance of $2.6 billion.
In her testimony today, Wyman noted that between 1992 and 2008, the state appropriated $5.7 billion in excess revenue that, if not spent on programs, would have been deposited into the Rainy Day Fund as surplus.
"I believe that now is the time to commit to making the fund an even higher priority as we create a roadmap for Connecticut's economic recovery and long-term fiscal stability," she testified.
Wyman's second proposal would allow the transfer of some projected surplus revenue to the Rainy Day Fund on a monthly basis whenever the projected surplus reaches 1% of appropriations. Any surplus revenue exceeding that 1% threshold would be transferred to the fund and be available to mitigate a shortfall if a projected surplus becomes a projected deficit as the year progresses.
"Ensuring that excess revenue is directed to the Rainy Day Fund, and raising the fund's cap to 15%, would be firm steps to strengthen fiscal protection for both government and taxpayers during the next economic slowdown," Wyman said.
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