With the economy improving, the state is now expecting a surplus of nearly $243 million for the current fiscal year — up sharply in the past month.
Gov. M. Jodi Rell announced the new projection Tuesday, noting that the latest estimates are $76 million above the numbers last month. The improvements caught some by surprise because Connecticut residents have been hearing mostly bad economic news since the collapse of the Lehman Brothers investment bank and the ensuing Wall Street downturn starting in September 2008.
"As our economy slowly recovers, the news continues to get better for our state budget and our taxpayers,'' Rell said in a statement. "We have three straight months of surplus and have added jobs in Connecticut in each of the last five months.''
Rell added, "If these projections hold, we will be able to apply more than $100 million of that surplus to pay down our securitization debt.''
Despite the better-than-expected numbers for the current fiscal year, the state is still projecting a deficit of more than $3 billion in fiscal year 2012.
The improvement of $76 million includes about $59 million in tax collections that came in higher than expected and about $21 million in lower spending by state agencies. State sales tax collections were $30 million higher than expected — meaning that many consumers are starting to spend again after the economic slowdown.
If the trend continues, projected state borrowing could drop by 10 percent for the year, officials said.
Senate President Pro Tem Donald Williams of Brooklyn described the uptick as "good news for Connecticut's bottom line'' that comes from expanding jobs.
"Expansions at Frito-Lay North America in Killingly and Electric Boat in New London are encouraging signs,'' he said. "We must remain focused on growing our economy and implementing the job-generating initiatives we approved in May."
Reprinted with permission of the Hartford Courant.
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