State Comptroller Nancy Wyman today projected that Connecticut will end the fiscal year with a budget surplus of $282.2 million, but warned that steps must be taken to stem the state's mounting debt.

Wyman's surplus estimate increased by $57.2 million from last month's, a rise she attributed to revenues from the income tax that continue to far exceed expectations. Income tax receipts are up 15.5-percent from January of 1997 - due to strong growth in jobs and wages - and are expected to end the year at least $340 million over budget.

Wyman said the state should capitalize on the surplus and the strength of the economy to address its growing debt. Connecticut's $9.2 billion bonded debt, and $16.3 billion overall debt, places its per-capita debt load among the highest in the country.

Wyman has proposed a tax-relief plan that would use the surplus to pay off debt, fill the state's Rainy Day Fund and issue rebate checks to taxpayers. She also stressed that real progress toward debt reduction must include restricting the issuance of new debt.

"Paying off old debt is a sound fiscal policy," Wyman said. "But not creating the debt in the first place is an even better practice."

Also today, Wyman said receipts from taxpayers' annual income tax filings are running 25-percent ahead of January 1997, indicating continued strength in capital gains associated with sound financial markets. Without the over-performance of the income tax, Wyman said, the state would be facing a deficit of about $58 million.

The state's sales and inheritance taxes are also contributing to the surplus, exceeding budget expectations by $75.9 million and $53.5 million, respectively.

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For Immediate Release
March 2, 1998

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