State Comptroller Nancy Wyman today projected the state will end the fiscal year with an unappropriated budget surplus of $304.5 million.

Wyman's surplus estimate is about $44 million higher than her projection last month. The increase is mainly due to a $12 million jump in lottery receipts, about $12 million in additional savings on state programs, and because the state paid about $10 million less in tax refunds than was expected.

Of the $304.5 million surplus, $161.7 million will be used to fill the state's emergency Rainy Day Fund and the remaining $142.8 million will be used to pay down the state's bonded debt.

Wyman noted that while she supports reducing the state's $9.2 billion bonded debt - which is the highest per-capita in the nation - the $142.8 million payment does little to accomplish this goal in light of the $1.2 billion in new bond authorizations that were approved for Fiscal Year 1999.

Wyman compared the $142.8 million payment to paying off an extra $100 on a personal credit card while at the same time running up another $1,000 in charges. She said a better alternative would have been to use the $142.8 million to pay down some of the state's $6.4 billion in pension debt.

"Applying the payment to the pension fund would allow the state to earn double-digit rates of return, which makes better financial sense than paying off low interest bonds," Wyman said.

Investing the surplus in the pension fund would save taxpayers $660 million in lower state contributions to the retirement fund over the next 35 years, or an average of $20 million per year.

Wyman said she plans to seek a legislative change that will allow future surpluses to be directed to paying down pension debt.

Wyman also noted that the year-end surplus would have reached an estimated $587.5 million if about $283 million of it had not been previously appropriated, including $116 million for taxpayer rebates, $80 million for the state's Year 2000 computer conversion and $40 million in additional payments to towns.

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For Immediate Release
August 3, 1998
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