In her next to last monthly budget letter to Gov. M. Jodi Rell, state Comptroller Nancy Wyman offered a very different opinion of how the state would end fiscal year 2011.
Rell’s budget office has maintained that the state will end the year with a $300,000 budget surplus, but Wyman predicts a $18 million deficit based mostly on unclaimed-property refunds.
Unclaimed-property refunds are payments made through the state Treasurer’s unclaimed-property program, called “The Big List.” The program, which features an Internet-based database of unclaimed property allows people to search by name and has become increasingly popular.
“The number of people filing for unclaimed-property refunds has exploded and the payouts are far exceeding projections,” Wyman said.
Aside from the unclaimed-property refunds, Wyman said there isn’t much disagreement with Rell’s budget office over the rest of the budget projections, but that’s only if the state doesn’t spend projected outlays to support the Low Income Home Energy Assistance Program.
“If such resources are required, the General Fund deficit would increase proportionately,” Wyman said in her Wednesday letter to Rell.
The good news is that revenues are increasing as the economy begins to turnaround.
“Most notably, the income tax is expected to exceed original budget estimates by $127.5 million, and the sales tax is projected to end the year $149.5 million over budget,” Wyman said.
“In fact, all major revenue categories are showing growth over last fiscal year. Connecticut’s slowly improving economy is helping to increase revenues; although, non-federal revenue sources are still projected to end the fiscal year well below the levels attained in Fiscal Year 2008 despite significant tax increases and revenue enhancements,” Wyman added.
But tempering those revenue gains are $233.4 million in deficiencies in the general fund.
“The deficiencies are largely attributable to higher program caseloads and the inability to achieve budgeted savings targets,“ Wyman said. “The largest single deficiency totals $172.5 million within the Department of Social Services. In addition, the state will rely on almost $650 million in borrowing to correct for structural budget imbalances.”
Wyman, who will be come lieutenant governor on Jan. 5, campaigned on a promise to switch state government over to Generally Accepted Accounting Principles (GAAP). It’s been an issue with her for quite some time and one of the policy stances that made her an attractive running mate for Governor-elect Dan Malloy.
“From a balance sheet prospective, the GAAP shortfall in the General Fund was $2.3 billion as of June 30, 2009. It should be noted that $947.6 million of this shortfall results from the fact that Economic Recovery Notes were not issued until Fiscal Year 2010, therefore those resources did not post to Fiscal Year 2009,“ Wyman wrote in her next to last letter to Rell. “GAAP based financials for Fiscal Year 2010 will be available in January.”