Some good news surfaced in struggling Connecticut, as the state’s budget director projected a $35.7 million surplus to close fiscal 2017.

According to Office of Policy and Management Secretary Benjamin Barnes, that marks a $142.9 million improvement from June, when the state was staring at a $107.2 million gap.

That's a $142.9 million improvement from last month, when it appeared the state was facing a $107.2 million shortfall.

State budget chief Benjamin Barnes cited austerity measures and some revenue improvements.

“This improvement is due to a combination of successfully implemented austerity measures and strong year-end performance for several revenue sources,” Barnes said in a letter Thursday to state Treasurer Kevin Lembo.

By law, any surplus will go into the stabilization fund, bringing the rainy-day balance to $271.3 million.

“It should be noted that remaining revenue accruals, as well as [generally accepted accounting principles] accrual adjustments, are not yet finalized and may have a material impact on this projection,” Barnes wrote.

The special transportation fund, according to Barnes, will end the year with an operating deficit of $39.9 million, while its fund balance as of June 30 will be $102.9 million.

Meanwhile, Gov. Dannel Malloy and the legislature are still stalled on a budget. Fiscal 2018-19 began on July 1.

Moody’s Investors Service rates Connecticut general obligation bonds A1, while S&P Global Ratings and Fitch Ratings assign A-plus ratings. Kroll Bond Rating Agency rates them AA-minus.

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Paul Burton

Paul Burton

Paul Burton is the Northeast Regional Editor for The Bond Buyer and the author of the book "Tales from the Newsrooms." He is a sought-after public speaker and has appeared on radio and TV shows, including former CBS News White House correspondent Sharyl Attkisson’s public-affairs program, “Full Measure.”