INCOME TAX REVENUES DRIVING
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Continued stronger-than-expected tax revenues offsetting a high level of overspending will produce a state budget surplus of $127 million for the 1997-98 fiscal year, state Comptroller Nancy Wyman said today.
The largest contributors to the increased revenues are the income tax, projected to produce $241.2 million over previous budget estimates, and the sales tax, projected at $75 million over budget, Wyman said. Total net tax receipts are expected to end the year at $395.6 million above the budget plan.
Spending, however, is projected to reach $215.2 million higher than budgeted. The overspending includes $134.7 million in additional agency requirements, $18.3 million for the new HUSKY medical coverage plan for uninsured children and a reduction of $58.8 million in targeted savings associated with the state's early-retirement program.
Wyman expressed her continuing concern that the surplus could be sharply affected by a drop in the extraordinarily high tax receipts.
"This historically high level of overspending is cause for concern," Wyman said. "Our state's positive budget position continues to hinge on higher than anticipated tax receipts compensating for spending increases that far exceed budget targets. This is a fiscal practice that can be expected to produce a budget imbalance over time."
A strong economy and low unemployment in Connecticut (4.6 percent) are major factors behind the jump in tax revenues, Wyman said. The latest estimate of a $127 million surplus matches Wyman's previous monthly projection.
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For Immediate Release
December 2, 1997
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