|STATE OF CONNECTICUT|
THE STATE COMPTROLLER
LETTER OF TRANSMITTAL
December 31, 2007
The Honorable M. Jodi Rell
Governor of the State of Connecticut
Dear Governor Rell:
I write to provide you with the Annual Report of the State Comptroller for Fiscal Year 2007. The statements have been prepared on the budgetary, modified cash basis of accounting as detailed on the inside front cover of this report.
The General Fund ended Fiscal Year 2007 with a surplus of $269,240.230. This compares to a surplus of $446,489,568 for Fiscal Year 2006. The balance in the Transportation Fund at the close of Fiscal Year 2007 was $192,946,329 as compared to $ 133,879,154. In Fiscal Year 2006. The entire General Fund surplus for Fiscal Year 2007 was transferred into the Budget Reserve Fund in accordance with Connecticut General Statutes, Section 4-30a. Prior to this deposit, the Budget Reserve Fund had a balance of $1,112,508,116. With this deposit the balance became $1,381,748,336, or 8.5 percent on net General Fund appropriations for Fiscal Year 2008. This is short of the statutory target of 10 percent of net appropriations.
Within the General Fund, $831,070,395 in Fiscal Year 2007 appropriations were brought forward to Fiscal Year 2008. In addition to this carry forward, $80 million of Fiscal Year 2007 revenue was reserved for Fiscal Year 2009 spending. Absent the carry forward and reservation of revenue, the 2007 General Fund surplus would have been in excess of one billion dollars. Between Fiscal Years 2006 and 2007, spending authority brought forward to the next fiscal year increased by $128,216,015 . Between Fiscal Year 2005 and 2006 that number had increased by $8,431,912. The change in the carry forward total represents the growth in the amount of planned future fiscal year spending that is covered by prior year revenue. The use of prior year revenue to fund current year spending can result in structural budget deficits to the extent that the spending is recurring.
Between Fiscal Years 2006 and 2007, General Fund expenditures grew by $794.1 million or 5.5 percent. This follows growth of 8.7 percent in the prior Fiscal Year.
General Fund revenue in Fiscal Year 2007 increased by $743.8 million or 5 percent from the prior year. Almost 80 percent of the revenue increase was attributable to the income tax, which experienced growth of 8 percent from the last fiscal year.
Growth was experienced in all major General Fund revenue categories. In Fiscal Year 2007, Transportation Fund revenue increased $111.2 million or 11.4 percent.
The Transportation Fund ended Fiscal Year 2007 with a positive balance of $192,946,329. This is a fund balance increase of $59,576,175 through Fiscal Year 2007 operations.
Connecticut added 20,200 jobs to payrolls in Fiscal Year 2007, as compared to 16,300 jobs added in Fiscal Year 2006. The state's unemployment rate remained below 5 percent throughout Fiscal Year 2007. The state's Personal income rose 6.8 percent in Fiscal Year 2007, exceeding the prior year's growth.
In addition to this budgetary accounting basis report, my office produces a Comprehensive Annual Financial Report based on Generally Accepted Accounting Principle (GAAP)
The preliminary GAAP based results For Fiscal Year 2007 show a negative unreserved balance in the General Fund of $990.9 million.
I would be happy to discuss any information contained in this report with you at your convenience.