Connecticut finished the fiscal year on June 30 with a surplus of $393.3 million, Gov. M. Jodi Rell announced last week. This was an increase of about $150 million from last month’s estimate and could mean a reduction in planned borrowing in the current fiscal year.
The state’s comptroller must officially “close the books” on the fiscal year before the budget surplus is certified.
The Office of Policy and Management credited the surplus to improvements in sales tax collections, insurance company revenues, and license, permit and fee revenues. Meanwhile, expenditures are $560.7 million below projections.
The two-year budget passed by lawmakers in September 2009 originally called for borrowing nearly $1.3 billion, but the amount was pared down after adjustments to the budget in spring. The final spending plan, signed by Rell on May 7, cut the amount of planned borrowing to $956 million.
It specified that the first $140 million of any surplus from fiscal 2010 would go into the general fund and that any additional surplus would be used to reduce required borrowing in fiscal 2011. The OPM’s estimate could mean that $253.3 million may be available to reduce the amount of borrowing to $702.8 million.
“Not only does this reduce our debt burden, it also reduces the structural deficit for fiscal 2012 and beyond because it means the payments we will have to make will be smaller,” Rell said. She also noted six consecutive months of job growth in Connecticut. At 8.8%, the state unemployment rate remains high, but is well below the national rate of 9.5%, she said.