STATE OF CONNECTICUT
THE STATE COMPTROLLER
|WYMAN ISSUES BUDGET DEFICIT OF $812 MILLION|
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today said the state ended the 2002 fiscal year with a budget deficit of $812 million.
More than half of the shortfall is attributed to the weak performance of the income tax, which brought in about $561 million less than original estimates. The extraordinary drop in income tax receipts is tied to job losses, falling stock prices and other factors tied to a generally weak economy.
"The September 11th attacks and recent revelations of corporate fraud added to the economic instability over the last fiscal year," Wyman said. "Spending cuts were made in our state budget throughout the year, but did not keep pace with the monthly drops in revenue."
The balance of $595 million in the state's Rainy Day Fund was used to cover a portion of the $812 million deficit, leaving a net shortfall of about $217 million.
Several economic indicators - such as consumer spending, retail sales, inventory levels and worker productivity - turned positive during the second half of the fiscal year. Declining corporate profits, however, slowed overall economic expansion and job growth.
There were a few bright spots in the state economy. A hike in the tobacco tax brought in $45 million above original projections. Insurance company taxes were $25.4 million higher than expected and the real estate conveyance tax was $10.7 million over estimates.
Gaming revenues from the lottery and casinos were $12.4 million and $9 million above projections, respectively.
Wyman said that due to ongoing accruals of certain revenues, the $812 million deficit figure may be altered slightly before the state officially closes its books on Sept. 1.
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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