The state’s chief fiscal officer announced Tuesday that the state will end the year with a $166.9 million surplus, a far cry from the more than $500 million deficit lawmakers struggled to close at the beginning of the year.
State Comptroller Nancy Wyman said in this letter to Republican Gov. M. Jodi Rell today that the 2010 budget increased $61.9 million since last month mainly due to increases in income tax collections. She attributed the increase to job growth. The state regained about 8,900 jobs from the 103,400 lost since the beginning of the recession.
“We still have a very long way to go before we can call it a recovery, but the good news is that most experts were not expecting any job growth at all this year,” Wyman said.
Income tax receipts swung upward from 6.3 percent below expectations in January to exceeding estimates by 2.7 percent through April. The sales tax also is showing signs of rebounding, although it remains below budgeted projections.
However, “even with the improving trend in tax receipts, General Fund tax revenues for Fiscal Year 2010 are estimated to be $197.9 million below initial budget projections,” Wyman cautioned.
She warned that most of the $500 million deficit wasn’t made up through budget gimmicks and one-time revenue streams, such as $1.278 billion in budget reserve funds, over $800 million in federal stimulus dollars, and payment deferrals or other one-time transfers.
The current $166.9 million estimated surplus is based on a budget of $18.6 billion for the fiscal year that ends June 30. There is still a $3.8 billion shortfall estimated in fiscal year 2012.