They don’t always agree, but budget analysts at the legislature’s Office of Fiscal Analysis and the Office of Policy and Management are both reporting that the 2014 budget surplus will be more than $500 million.
The Office of Fiscal Analysis released its projections Monday, pegging the state’s 2014 budget surplus at $513.4 million. It’s an improvement of more than $396.3 million over their last report in November.
Most of the improvement is attributed to the Jan. 15 consensus revenue estimates. OFA also is predicting a $31.7 million decrease in spending.
Two years ago at this time of the year, OFA predicted that the state’s 2012 deficit would be larger than Gov. Dannel P. Malloy’s budget office estimated.
That year the state ended up having to return for a special legislative session in December to erase a $365 million deficit, which was greater than one percent of general fund spending.
State Comptroller Kevin Lembo will certify the monthly budget numbers on Feb. 3.
At the beginning of January, Lembo predicted the state would end the year with a $273.3 million surplus, but on Tuesday he told WTIC that he expects that number to double based on the consensus revenue estimates.
“While there’s surplus we still need to be cautious,” Lembo said.
Lembo would like to see any additional money go into the Rainy Day Fund. Democratic Gov. Dannel P. Malloy has hinted that he would like to give some of the money back to constituencies he asked to sacrifice in his first budget package.
“We talk about the Rainy Day Fund, but I think if we’re going to frame it correctly it’s probably a tax stabilization fund,” Lembo said. “The dollars that we put away in that account sort of help the state weather the ups and downs in the economy.”
Lembo said he’s not naive enough to believe all $500 million of the surplus will get put away in the Rainy Day Fund, but he will have been successful if he gets at least some of it put away under lock and key.
Lembo said this recovery is “unique” and it’s not something that the state has seen before, making it difficult to predict.
“There’s a lot about this new normal that we just don’t know yet,” Lembo said.
He said if there’s any spending from the surplus it should be applied to one-time commitments, instead of recurring commitments.