STATE OF CONNECTICUT
THE STATE COMPTROLLER
|WYMAN SAYS WEAKENING ECONOMY IS SHRINKING BUDGET SURPLUS|
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today projected that a continuing decline in tax revenues will result in a 2001 budget surplus of $619.5 million - a drop of $27.4 million from last month's estimate.
Wyman said the major reason for the decline was a sharp reduction in the amount of sales taxes taken in by the state. Retail sales in June grew by a sluggish 0.2 percent.
"Consumer spending is clearly down due to the weakening economy," Wyman said. "This is a trend that has been evident for the past several months both in Connecticut and the nation overall."
Stagnant growth in employment, leading to a drop in payroll withholding taxes, also contributed to the smaller surplus estimate. Wyman's projection matches the most recent estimate made by the Governor's budget office, the Office of Policy and Management.
The slowing of overall revenues has been partially offset by strong growth in the estimated and final tax payments category of the income tax, Wyman said. The income tax is expected to produce about $522 million more than was originally anticipated.
Wyman noted that the net year-end surplus will likely be about $30.6 million due to the appropriation of $588.8 million of the estimated gross surplus for various programs.
Wyman has advocated that the surplus be used to increase the state's emergency Rainy Day Fund and to pay off the state's extraordinarily high debt, or to fund one-time expenses only.
The State Comptroller appreciates input on this and other issues from residents of the state. Please feel free to contact her office by phone - (860) 702-3300; mail - OSC, 55 Elm Street, Hartford, CT 06106; or, via E-mail - firstname.lastname@example.org
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