Connecticut ended its fiscal year Thursday with an $85.5 million surplus in its coffers, which immediately was soaked up by retiree health care costs and payments on borrowing the state had to do in 2009, when the bottom fell out of revenues.
The revenue picture started improving at the beginning of this year, when Comptroller Kevin Lembo projected that the surplus would be less than $2 million. In February, he expected about $57 million; later that projection climbed to more than $500 million and, last month, to $679 million. Because of that projection, the state did not borrow $646 million it had planned, which dropped the surplus to about $33 million. In the last month of the year, revenue outpaced expenses again by an additional $52 million.
All three of the state's major revenue streams - income taxes, sales taxes and corporate income taxes - were stronger than in the previous fiscal year, and much stronger than projected. State forecasters had projected sales and corporate income taxes to fall, and income taxes to be up low single digits. Instead, income taxes are up close to 10 percent, sales taxes are up 4 percent and corporate income taxes are up more than 15 percent.
The state will put $14.5 million of the surplus into a fund to pay future retiree health costs, and $71 million will go towards $915.8 million the state borrowed in 2009 for operations that year.
Reprinted with permission of the Hartford Courant.
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