State Surplus Reaches $159 Million, But It Won't Ease Budget Woes

August 01, 2011|By DAN HAAR, dhaar@courant.com, The Hartford Courant

 

Even as economic storms gather, the state's projected surplus for the fiscal year that ended June 30 has reached $158.9 million, Comptroller Kevin Lembo said Monday, up from a forecast of $85.5 million one month earlier.

 

The figure could climb further before the state closes its books for fiscal 2011, as tax collections continue to outpace predictions.

The surplus, however, is already accounted for, to pay back debt and future liabilities, Lembo said, so it will not ease the budget woes of the current fiscal year.

Worse, the surplus occurs amid a declining jobs picture, leading many officials to predict that the trend will not continue this year. Connecticut employers cut nearly 10,000 jobs in May and June alone, and the jobless rate remains at 9.1 percent.

 

Without one-time shots such as $739.6 million in federal stimulus money, the state would have had a deficit of more than $1 billion in the recent fiscal year, Lembo said. And looking ahead, the ongoing federal budget stalemate — which will not end regardless of the outcome of Monday night's scheduled vote on the debt ceiling — could lead to cuts in federal aid to Connecticut.

 

"These economic uncertainties reinforce my position that the state must plan for its own economic health and rebuild its Budget Reserve Fund — or Rainy Day Fund," Lembo said in a written release.

 

http://articles.courant.com/2011-08-01/business/hc-lembo-warning-20110801_1_comptroller-kevin-lembo-budget-woes-debt-ceiling