After months of talking about huge deficits, Gov. M. Jodi Rell says this year’s state budget surplus has ballooned to $242.9 million, an increase of $76 million over last month’s estimates.

“We have three straight months of surplus and have added jobs in Connecticut in each of the last five months,“ Rell said. “People are going back to work, consumers are spending more and our revenues have begun to climb.”

Most of the surplus is attributed to a $58.9 million increase in revenues and $20.5 million in projected lapses in state agency spending.

The surplus will be applied to next year’s budget to reduce the amount of borrowing that the state did in an effort to close that year’s budget hole.

“If these projections hold, we will be able to apply more than $100 million of that surplus to pay down our securitization debt,” Rell said.

However, it doesn’t really do anything to help close the estimated $3.4 billion deficit the next governor will inherit in January 2011. The deficit projected for fiscal year 2012 amounts to about half of what the state brings in annually in income tax revenues.

Currently the fiscal year 2011 deficit is balanced on paper. Adjustments to the $19.01 billion budget were made on the last day of the legislative session, May 5. The General Assembly and Rell agreed to borrow close to $1 billion in 2011 to close that year’s budget deficit after closing this years budget deficit with about $323 million in spending cuts, fund sweeps, and other means.

Rell, who decided not to seek re-election last November, put a positive spin on the numbers.

“The past two years have put an incredible burden on state finances and our taxpayers, so this news really is uplifting,” Rell said. “These OPM projections are the latest in a week of some very good economic news for Connecticut.”

Sen. President Donald Williams, D-Brooklyn, shared Rell’s positive sentiment about the numbers.

“The latest budget projection from the Office of Policy and Management (OPM) for the current fiscal year is good news for Connecticut’s bottom line,” Williams said. “Revenues are rebounding as our economy begins to recover from the global recession. The additional revenues will allow us to significantly reduce borrowing in the next fiscal year.”

State Comptroller Nancy Wyman who will release her budget projections on July 1 said she’s taking more of a “wait and see” approach. She said while Tuesday’s numbers are good news there’s still a very large hole in the budget. Looking at the budget over the long term Wyman said some of the structural deficits still have not been addressed.