Comptroller Natalie Braswell today, in her monthly financial and economic update, projected a General Fund surplus of $1.51 billion for Fiscal Year 2022 while raising concerns about rising rental costs in Connecticut.
“This month’s surplus projection reflects the enormous progress our state has made in addressing long-standing fiscal concerns and withstanding the worst of the pandemic,” said Braswell. “However, there is tremendous volatility, both nationally and globally, that is putting stress on working families and keeping everyone from experiencing the benefits of our current economic success.”
Braswell cited the Russian invasion of Ukraine, continued inflation and likely upcoming interest rate increases as factors stressing the national and global economies, even as America experiences sustained job growth and an extremely competitive labor market.
In Connecticut, a lack of inventory in the housing market continues to put upward pressure on prices. Year-over-year sales of single-family homes declined nearly 17% in January. New listings were down over 21% in the same span. With fewer homes available, prices are rising. The median sales price is now $340,000, up nearly 4%.
The competition for housing extends to the rental market, raising concerns about overall housing security. In Connecticut, average rent increased 15.37% year-over-year, from $1,544 to $1,782 per month.
“Many families in our state are finding it harder and harder to afford housing,” said Braswell. “Over half of Connecticut renters are already cost-burdened. With inflation driving up the cost of everyday essentials, rising rent threatens the ability of workers to save, pushing homeownership out of reach.”
Nationally, the share of first-time homebuyers has been decreasing as more of the available housing inventory is purchased by investors and those seeking to rent out homes.
“It’s in our economic best interest to help more young families purchase homes and grow our middle class,” said Braswell. “Everyone in Connecticut deserves housing security and to share in the benefits of the long-term budgetary planning that is beginning to pay big dividends for taxpayers.”
In a letter to Governor Ned Lamont, Braswell noted that, in addition to the substantial surplus, she is also projecting another large transfer into the state’s Budget Reserve Fund (“Rainy Day Fund”) due to excess revenue in certain volatile categories. Because the fund has reached its statutory cap, an estimated $2.51 billion will be available to pay down debt, including the state’s pension liabilities.
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