The state of Connecticut ended the fiscal year with a nearly $746 million surplus this month, a decrease of $854 million from last month, according to state Comptroller Sean Scanlon.
The $845 million decrease in surplus is the result of a $323.9 million decrease in revenue projections and a $530.1 million increase in projected expenditures, both a result of the recent passage of the two-year $51 billion budget.
The $323 million decrease in revenue projections is primarily due to the elimination of the use of American Rescue Plan Act (ARPA) funding. The $530.1 million increase in projected expenditures is driven by reducing projected lapses by more than $350 million as a result of carryforwards identified in the act, and increasing debt service expenditures by more than $211.7 million in order to effectuate the cancelation of the GAAP financing bonds issued in 2013.
But a decreasing surplus is not necessarily a bad thing, according to Scanlon who says Connecticut’s economy is showing signs of improvement.
Scanlon said the state added 5,000 jobs in May and unemployment was at 3.7%, which is the same as the national unemployment rate for the first time since June 2020.
“Even after passing the largest tax cut in state history, we still ended the fiscal year with a $745-million surplus,” Scanlon said. “2023 marked the fifth consecutive year we ended the fiscal year with a surplus and that, in addition to significant job growth, is something worth celebrating as we continue to experience a turnaround in Connecticut’s fiscal and economic health.”
