State Comptroller Nancy Wyman has projected a state general fund surplus of $120 million for Fiscal Year 1996-97, due in large part to income and sales taxes continuing to outstrip budget estimates.

Wyman also stressed again that despite the likely surplus, policy makers should guard against using it for any program that will require spending in the out years. "Even with this $120 million surplus, we still need another $90 million to fulfill our statutory obligation to a rainy day fund representing 5 percent of our net General Fund appropriations," Wyman said. "After that, we should concentrate on reducing our debt."

In her monthly letter on state finances, Wyman estimated that income tax collections would exceed estimates by $116.3 million and that sales taxes would be $98.3 million more than estimated for the year ending June 30, 1997.

However, Wyman also noted that state spending will likely be greater by about $81.5 million than the state budget estimated. The higher spending reflects increases in Medicaid and welfare-related accounts ($44.2 million more than the budget in the Department of Social Services), and in Department of Children and Families programs ($35 million more than planned).

Wyman said increased income tax collections were due to a gain of 20,500 jobs in the state since the beginning of the year, a 2.3 percent increase in hourly earnings, a 5 percent second-quarter gain in total personal income, and a 25 percent increase in the stock market from the same time last year.

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For Immediate Release
December 3, 1996

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