STATE OF CONNECTICUT
THE STATE COMPTROLLER
|WYMAN SAYS STATE WILL END YEAR WITH $242.9 MILLION SURPLUS
|Contact: Steve Jensen|
State Comptroller Nancy Wyman today projected the state will end the 2010 fiscal year with a budget surplus of $242.9 million - a $76 million jump since last month.
The main reason for the increase was higher receipts of the sales tax - the largest tax category after the income tax. After many months of double-digit declines, the sales tax began rebounding in March and has been producing average monthly gains of about 2 percent.
The rise in sales tax receipts is tied to a gain in jobs over the same time period. Connecticut lost 103,000 jobs in the recession that began in March 2008, and has gained back almost 15,000 jobs since January. Still, Wyman said, the sales tax is expected to bring in about 5 percent less revenue overall than last year.
"The sales tax picture is a good indicator of how deep of a hole the recession created in revenues," Wyman said. "Even with the recent improvements, we still have a long way to go before we can call this a recovery."
Wyman noted that while job growth is increasing faster than most experts predicted, the unemployment rate remains very high at 8.9 percent. In the 1990 recession unemployment peaked at 7.4 percent and in the recession of 2001 it peaked at 5.6 percent.
Wyman also cautioned that a $500 million deficit projected for most of the fiscal year was mainly eliminated not by revenue gains, but by deficit-mitigation measures that included federal stimulus dollars, deferral of payments to the state pension fund and one-time transfers of money from accounts including the Rainy Day Fund.
Although the 2010 fiscal year ended June 30, the state still accrues receipts in several major tax categories through July, and Wyman will close the books and issue her final budget forecast 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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For Immediate Release
July 1, 2010
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