PRESS RELEASE FROM STATE COMPTROLLER’S OFFICE

 

WYMAN SAYS STATE WILL END

FISCAL YEAR WITH $900,000 SURPLUS

 

June 1, 2004

State Comptroller Nancy Wyman today projected that $900,000 of surplus tax revenue will remain at the end of the fiscal year June 30, following recent appropriations of about $238 million from the original surplus.

The surplus had reached an estimated $239 million before the General Assembly implemented Public Act 04-216, which provided for $112.4 million in additional spending in fiscal 2004 and transferred another $125.3 million to the General Fund for fiscal 2005.

The remaining $900,000 surplus will be deposited into the state's emergency Rainy Day Fund. Wyman said she was disappointed that a larger portion of the surplus was not dedicated to the fund, which was drained of its $590 million balance to deal with a deficit two years ago.

"Rebuilding the Rainy Day Fund during the current economic upturn should be a major priority for state government," Wyman said. "There is no better insurance to guard against repeating the fiscal nightmare the state went through over the past two years."

Most of the surplus is tied to a slowly improving national and state economy, Wyman said, especially capital gains and dividend tax payments related to growth in the financial markets. Those factors also resulted in the payment of about $50 million less in state tax refunds by the Department of Revenue Services than was anticipated.

Wyman said there also are signs that the state job market are strengthening. After months of decline, about 4,000 jobs were gained in April and the unemployment rate dropped from 4.9 percent to 4.5 percent. The employment spike means Connecticut has gained a net of about 500 jobs during the 2004 fiscal year.

Wyman cautioned, however, that the state's corporate sector remains flat. Payments of taxes on corporate profits are expected to end the year about $113 million below original estimates.