|STATE OF CONNECTICUT|
THE STATE COMPTROLLER
LETTER OF TRANSMITTAL
March 15, 2007
The Honorable M. Jodi Rell
Governor of the State of Connecticut
Dear Governor Rell:
I write to provide you with the Annual Report of the State Comptroller for Fiscal Year 2006. The statements have been prepared on the budgetary, modified cash basis of accounting as detailed on the inside front cover of this report.
The General Fund ended Fiscal Year 2006 with a surplus of $446,489,568. This compares to a surplus of $363,863,247 for Fiscal Year 2005. The unappropriated surplus in the Transportation Fund for Fiscal Year 2006 was $133,379,154, as compared to $133,067,491 in Fiscal Year 2005. The entire General Fund surplus For Fiscal Year 2006 was transferred into the Budget Reserve Fund in accordance with Connecticut General Statutes, Section 4-30a. Prior to this deposit, the Budget Reserve Fund had a balance of $666,018,548. With this deposit the balance became $1,112,508,116.
Within the General Fund, $702,854,380 in Fiscal Year 2006 appropriations were brought forward to Fiscal Year 2007. In addition to this carry forward, $41 million of Fiscal Year 2006 revenue was reserved for Fiscal Year 2007 spending. Absent the carry forward and reservation of revenue, the 2006 General Fund surplus would have been in excess of one billion dollars. Between Fiscal Years 2005 and 2006, spending authority brought forward to the next fiscal year increased by $8,431,912. Between Fiscal Years 2004 and 2005 that number had increased by $481,560,411. The change in the carry forward total represents the growth in the amount of planned future fiscal year spending that is covered by prior year revenue. The use of prior year revenue to fund current year spending can result in structural budget deficits to the extent that the spending is recurring.
Between Fiscal Years 2005 and 2006, General Fund expenditures grew by $1.166 billion or 8.7 percent. This follows growth of 6.3 percent in the prior Fiscal Year. Approximately two-thirds of the Fiscal Year 2006 dollar increase in spending can be attributed to health care and education programs.
General Fund revenues in Fiscal Year 2006 increased by $935.9 million or 6.7 percent from the prior year. Almost two-thirds of the revenue increase was attributable to the income tax, which experienced growth of 10.5 percent from the last fiscal year.
Growth was experienced in all major General Fund revenue categories. In Fiscal Year 2006, Transportation Fund revenue increased $39.4 million or 4.2 percent.
Connecticut added 16,300 jobs to payrolls in Fiscal Year 2006, as compared to the 14,400 jobs added in Fiscal Year 2005. The state's unemployment rate remained below 5 percent throughout Fiscal Year 2006. The state's Personal income rose 5.4 percent in Fiscal Year 2006, approximating the prior year's growth.
The Transportation Fund ended Fiscal Year 2006 with a positive balance of $133,379,154. This is a fund balance increase of $311,633 through Fiscal Year 2006 operations.
In addition to this budgetary accounting basis report, my office produces a Comprehensive Annual Financial Report based on Generally Accepted Accounting Principle (GAAP). The preliminary GAAP based results For Fiscal Year 2006 have also been published and show a negative unreserved balance in the General Fund of $1.058 billion.
I would be happy to discuss any information contained in this report with you at your convenience.