Larger-than-anticipated gains in the sales tax, inheritance tax and income tax continue to keep this year‘s budget in the black, state Comptroller Kevin Lembo said Friday.
In his monthly letter to Gov. Dannel P. Malloy, Lembo said after applying all the one-time revenues and gimmicks a $2 billion budget deficit becomes “a small operating surplus of $116.4 million.”
The income tax increased $211 million, the sales tax increased $177.1 million, and the inheritance tax increased $97.9 million.
“The income tax is showing its strongest gains in the estimated payment portion of receipts, which is outperforming last year by 19 percent. The largest areas of underperformance are in the real estate conveyance tax and federal grants,” Lembo said.
Tempering the revenue gains are deficiencies of $321 million.
“The deficiencies are largely attributable to higher program caseloads and the inability to achieve budgeted savings targets,” Lembo said. “The largest single deficiency totals $232 million within the Department of Social Services (DSS).“
The Medicaid Low Income Adult program has experienced a 27 percent increase in caseload through the first half of this year and other programs are under similar pressures.
Meanwhile Connecticut’s unemployment rate remains at around 9 percent, but Lembo said the economy saw some improvements.
State exports grew at a robust 14.7 percent in 2010 as the economy rebounded from recession. Transportation equipment exports provided the largest volume of activity. Electrical equipment and related components grew at a rate of over 23 percent in 2010.
“Transportation equipment trumped all other exports, and the fuel cell industry enjoyed its own momentum in recent years,“ Lembo said. “Connecticut has established itself as a leader in fuel cell technology development and manufacturing – and must maintain that leadership in a field that could produce thousands more jobs in the coming years.”
A report from the Connecticut Center for Advanced Technologies found that employment in Connecticut’s hydrogen and fuel cell industry has grown by 28 percent from 2006 to 2010 – and is projected to grow by 12 percent each following year.