FOR IMMEDIATE RELEASE TUESDAY, JULY 1, 2014
Comptroller Kevin Lembo today announced that the state is currently on track
to end Fiscal Year 2014 with a $33.2-million surplus.
While Fiscal Year 15 officially begins today, a final surplus for Fiscal Year
14 will be determined later this year after the books have been audited and
closed for Fiscal Year 2014, Lembo said.
In a letter to Gov. Dannel P. Malloy, Lembo said he agrees with the Office of
Policy and Management's (OPM) latest projection, which is a reduction of $10.1
million from last month's estimate.
This month's revenue projection is down $75.5 million from last month - the
vast majority related to outstanding federal reimbursements that the state has
claimed, but not yet received. The state is actively seeking $65.5 million in
federal recoveries for costs incurred by the Departments of Developmental
Services and Mental Health and Addiction Services, Lembo said.
A large portion of this month's projected General Fund revenue decline is
offset by a $65.1-million increase in anticipated budget savings. A list of
General Fund estimated lapses are included here.
"The state's budget, ending in surplus, is reflective of the overall economic
outlook - a saw-tooth recovery that is headed in the right direction, but
slowly," Lembo said, pointing to the state's fourth consecutive month of
employment growth. "Connecticut's overall economy has shown signs of gradual but
In accordance with existing law, the surplus will be deposited to the Budget
Reserve Fund - as Lembo has long advocated - on the date that the books have
been audited and closed for Fiscal Year 2014. The reserve balance at the end of
Fiscal Year 2013 was $270.7 million, or approximately 1.6 percent of net
Total General Fund revenue for Fiscal Year 2014 is expected to be $116
million below the original budget plan. The largest shortfall is in the income
tax, which is estimated to underperform the budget plan by $176 million. Both
the sales tax and corporation tax are exceeding initial budget estimates by
$65.6 million and $42.5 million respectively.
Overall General Fund expenditures for Fiscal Year 2014 are projected to be
more than $144 million below the budget plan.
Lembo highlighted data and other information from federal and state
Departments of Labor and other sources that show:
- Year-to-date gains in the employment-driven withholding portion of the
state income tax remained positive through May growing 2.7 percent from a year
ago. The monthly growth in year-to-date withholdings has averaged 1.4 percent so
far in Fiscal Year 2014. As can be seen from the graph below, monthly receipts
accelerated during the second half of the year.
- Taking a longer view, in the four years leading up to the last recession,
the annual increase in income tax withholdings averaged 6.9 percent. In Fiscal
Year 2011 and 2012, the withholding receipts spiked due to an increase in the
income tax rates. Factoring out the rate increase, withholdings have not yet
attained post-recession growth levels.
- Connecticut gained 5,800 payroll jobs in May. This is the fourth
consecutive month of employment growth in the state. According to the Department
of Labor, Connecticut has regained 71,600 payroll positions, or 60.1 percent of
the 119,100 positions lost to the March 2008 - February 2010 employment
recession. The state has regained 73.2 percent of the private sector jobs lost
during the recession.
- Nationally, all of the private jobs lost to the recession had been recovered
by March 2014 and all of the recessionary loss was recovered by May.
- The table below shows the distribution of employment gains and losses, by supersector, over the latest 12-month period ending in May.
|Job Gains Latest 12 Months
||Job Losses Latest 12 Months || |
||Sector || |
|Transp. & Utilities
||5,000 || Government ||-2,600|
|Leisure and Hospitality
||4,900 ||Financial Activities || -1,500|
|Education & Health
||4,800 ||Manufacturing ||-1,300|
||1,800 ||Information ||-500|
|Professional & Business
||1,800 || || |
|| 100 ||
- Connecticut's unemployment rate was 6.9 percent in May; the national
unemployment rate was 6.3 percent that month.
- There are approximately 129,800 unemployed workers in Connecticut. A low of
36,500 unemployed workers was recorded in October of 2000.
- The Department of Labor calculates that average private sector weekly pay was
$935.09 in May, down $2.01, or -0.2 percent over from the same period a year
- Average hourly earnings of private sector workers have struggled to establish
a consistent growth trend over the last two years.
- The year-to-year change in the Consumer Price Index for All Urban Consumers
(CPI-U, U.S. City Average, not seasonally adjusted) in May 2014 was 2.1 percent.
- Based on data released by the Bureau of Economic Analysis on June 24, personal
income in Connecticut grew at an annualized rate of 3.7 percent in the 1st
quarter of 2014. This ranked Connecticut 16th in quarterly personal income
growth. State personal income grew at a rate of 2.1 percent between 2012 and
2013 ranking Connecticut 37th nationally in personal income growth.
- The chart below shows the annual trend in Connecticut personal income over
time. The 2014 estimate is based on annualizing 1st quarter results.
Read the Comptroller's Full Letter |
View PDF for Economic Indicators