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Comptroller Finds State Economy Up Sharply, Surplus Even Higher

Contact: Bob King
860-703-3311 or 860-702-3300

Recent economic figures and greatly increased state tax collections show that "Connecticut is a full participant in the national economic expansion," State Comptroller Nancy Wyman said Monday as she made her monthly report on the state's financial position.

Wyman said her projection of the state's general-fund surplus for the fiscal year ending June 30 has grown to $268.4 million, a result primarily of income tax collections running 9 percent higher than last year. The state will collect some $3.14 billion in income taxes this year, Wyman projected -- $291 million more than the state budget planned for. "This performance reflects solid state economic growth driven by a rapidly expanding national economy," Wyman said, noting that federal figures show the national economy growing at a phenomenal 5.8 percent for the first quarter. "In Connecticut, almost all economic figures are up. The state has recovered almost half the 158,000 jobs lost during the recession, personal income growth is strong, and housing permits are up 44.9 percent this quarter."

The figures are good news for lawmakers trying to craft a new biennial budget, Wyman added. "The increasing surplus and economic prosperity provide the state with a unique opportunity to provide meaningful tax relief while maintaining essential state services," the Comptroller said.

Wyman called for using some measure of the surplus to reduce the state's highest-in-the-nation per capita long-term debt. "Paying off our debt during good economic times will allow us to reduce our debt service payments, a benefit to future generations," she said. The legislature's Appropriations Committee has approved plans to use $166.7 million of the surplus to retire the remainder of the state's 1991 debt. Should this committee action become law, the general-fund surplus would decrease to $101.7 million, Wyman projected.

In addition to the income tax increases, sales and corporation tax collections are also running well over budget. Wyman's estimate for net general-fund revenues is greater than that of the governor's budget office by about $70 million.

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For Immediate Release
June 2, 1997
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