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Kevin Lembo
Former CT State Comptroller

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Comptroller Lembo Projects $911.9M Surplus in Final Financial and Economic Update

December 31, 2021

Comptroller Kevin Lembo today, in his final monthly financial and economic update, projected a General Fund surplus of $911.9 million for Fiscal Year 2022 while highlighting positive aspects of Connecticut’s economic recovery.

“Connecticut’s economy continues to improve,” said Lembo. “As our state builds on its recovery after the worst of the pandemic, the benefits of smart long-term planning are also coming to fruition, leading to job growth and unprecedented budgetary stability. I urge policymakers to ensure that the benefits of our recovery reach as many people as possible, and to build on our successes by staying the course and maintaining our current momentum.”

Connecticut added an estimated 5,600 jobs in November, marking the eleventh consecutive month of job growth. It was a particularly strong month for the manufacturing sector, a positive sign heading into the new year. The state has now recovered 75.3% of the jobs lost at the onset of the pandemic.

While the labor market continues to churn, Connecticut’s quit rate in November was 2.2%, the second lowest in the nation. Both new and continuing unemployment claims have now returned to pre-pandemic levels.

The state’s gross domestic product (GDP) increased by 2.7% in the third quarter, outpacing both the regional and national average.

Sales prices for single-family homes increased this month compared to this time last year but, overall, the market continues to cool off. Low inventory has led to a decline in total sales and the corresponding pressure has driven up rental prices, which are now up over 17% in the last year. That dynamic generates long-term concerns over housing stability but, due largely to state-level assistance programs, Connecticut has thus far avoided a spike in evictions.

“We’re seeing positive trends in many key areas,” said Lembo. “People are understandably concerned about the ever-changing nature of COVID-19 and what it means in their everyday lives, but the underlying economic conditions should instill confidence. Connecticut is better prepared to meet financial challenges than ever before, and the economy should continue to improve as global supply chain issues subside over time.”

In a letter to Governor Ned Lamont, Lembo also projected another large deposit into the state’s Budget Reserve Fund (“Rainy Day Fund”) of approximately $1.88 billion, with $1.76 billion available to reduce unfunded pension liability. A law originally proposed by Lembo captures excess revenue in particularly volatile categories and automatically deposits them into the Rainy Day Fund. Because that fund has reached its statutory cap, any additional deposits above that level would instead be used to pay down the state’s pension debt, as has happened the last two fiscal years.

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