A moderating of last year's exceptional economic growth in Connecticut is expected to produce a year-end budget surplus of $11.2 million for fiscal year 2000, State Comptroller Nancy Wyman said today.

In her monthly surplus estimate to the Governor, Wyman said second-quarter job growth increased at its slowest pace since 1995, and new auto registrations and housing permits declined sharply. With the state unemployment rate at a historically low 2.1 percent, Wyman said, the potential for economic expansion through the creation of jobs is limited.

Income tax revenues account for about half of the projected $11.2 million surplus. Last fiscal year, the income tax produced about 70 percent of a record-setting $620 million surplus that was ultimately reduced to $69.3 million by General Assembly appropriations.

While this year's surplus is not expected to approach last year's extraordinary windfall, Wyman noted that her current surplus estimate is based on only two months of revenue data, and that the state's economy remains healthy overall.

"At this early point in the fiscal year, conservative estimates of revenue growth are warranted, Wyman said. "These numbers also should be a warning to state government to take whatever means necessary to keep spending under control."

Wyman's estimate is about $800,000 lower than last month's, mainly due to adjustments made for legal claims recently paid by the state.

In addition to calling for state government to control spending in light of expected revenue reductions, Wyman said she will push for the state to adopt a new financial-management system that would give policymakers a much more detailed picture of state spending than is available now.

Called Performance Based Budgeting, the system would use hard financial data to determine which state programs are cost-effective and which are not. That detailed information would allow policymakers to target specific areas where savings can be achieved, rather than making across-the-board spending cuts.

If Performance Based Budgeting produced a savings of even one half of one percent of current spending, Wyman said, that would result in a quarter-billion-dollar savings to taxpayers over five years.

The State Comptroller appreciates input on this and other issues from residents of the state. Please feel free to contact her office by phone - (860) 702-3300; mail - OSC, 55 Elm Street, Hartford, CT 06106; or, via E-mail - osc.opinions@po.state.ct.us

Learn more about the Connecticut Comptroller's Office by calling up our Internet Home Page, at the link below.

For Immediate Release
October 1, 1999

Back to Comptroller's Home Page
Back to Index of Comptroller's Press Releases