|COMPTROLLER KEVIN LEMBO|
|Contact :||Tara Downes||TUESDAY, FEBRUARY 1, 2011|
COMPTROLLER LEMBO PROJECTS $57.2 MILLION SURPLUS; SAYS STAGNANT JOB GROWTH COSTING CT MILLIONS
Comptroller Kevin Lembo - just weeks before the state administration releases its two-year budget - projected that Connecticut will end the 2011 fiscal year with a $57.2 million fund surplus.
This surplus exceeds last month's estimate by $56 million, attributed to revenue increases from income tax, the inheritance and estate tax and other categories.
However, Lembo said the slight income tax growth, while welcome, is still about $600 million below what it was just three years ago.
In his first financial report to Gov. Dannel P. Malloy since taking office, Lembo said state unemployment remains historically high at 9 percent, with no signs of recovery. He said the stagnant job market is the state's greatest obstacle to financial recovery because it has forced more unemployed residents to rely on costly state social services, and undermined greater income tax growth.
"Connecticut continues to battle with historic and unshakable unemployment - our greatest obstacle to financial recovery," Lembo said. "Today's unfortunate news from Pfizer - that it will eliminate more than 1,000 Connecticut jobs - reinforces the need to make job restoration priority one. Employment growth is key in diminishing state spending on social services, and propelling state revenue.
"We are projecting a $57.2 million surplus for the end of fiscal year 2011 - better than last month's outlook, but far worse than Connecticut's financial status only a few years ago.
"My office is currently reviewing all state purchasing functions related to the Office of the State Comptroller - identifying measures to operate state and local governments more cost efficiently. We will be implementing various cost-saving steps in the coming weeks and months."
Lembo said Connecticut construction jobs particularly suffered - declining 6.6 percent this year.
The few bright spots for Connecticut employment were in business and professional services, which grew 4.2 percent for the year. This job category includes accounting, bookkeeping and payroll; architectural, engineering and specialized design; computer; consulting; research; advertising; photographic; translation and interpretation; veterinary; and other professional, scientific and technical services.
Leisure and hospitality also grew slightly by 2 percent in 2010.
In terms of state revenue and expenditures, Lembo said the projected surplus is based on a $118.6 million increase in projected revenue, including $83.5 million in income tax, $17.9 million in the inheritance and estate tax, and $17.2 million in various other categories.
These revenues are partly offset by increased spending of $62.6 million collectively through the Department of Social Services and the Department of Mental Health and Addiction Services related to the low-income adult Medicaid population.
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