February 5, 1997
Dear Citizens of Connecticut:
As Comptroller, I serve as the state's chief fiscal guardian. I am responsible for protecting the state's assets and safeguarding its financial future. In performing my duties, I continually monitor the state's fiscal condition and report directly to you, the citizens of Connecticut. In that capacity, I am pleased to provide you with a copy of The Comptroller's Report: Connecticut's Economic Health.
In last year's report, I identified several areas of concern and called for fiscal restraint in the formulation of the state budget. I commend the Governor and the General Assembly for acting to address many of these concerns. During Fiscal Year 1996, state spending increased at a modest 2.5 percent rate; at the same time, tax revenues advanced at a rate of 7.6 percent. The combination of slower spending growth and strong tax receipts improved the state's overall financial position.
This year's report calls again for fiscal prudence. As the report illustrates, the state's economic performance shows improvement, but not all citizens, geographic regions, or sectors are participating in the recovery. In Fiscal Year 1996, the state's General Fund showed an operating surplus; however, concentrating on the General Fund alone does not reveal the whole financial picture. This document takes a broader look at state finances and covers all operating funds. When all governmental activities are accounted for, a state operating deficit results for Fiscal Year 1996. The good news is that the state's operating deficit is at a five-year low. The bad news is that per-capita state debt has more than doubled since fiscal year 1990, the rainy day fund contains only half of the reserve required by law, and the pension system remains seriously under-funded.
The Comptroller's Report: Connecticut's Economic Health is divided into three sections that cover the state's overall fiscal position as reported under Generally Accepted Accounting Principles (GAAP), the state's economic outlook, and the changing demographics of Connecticut. As the report demonstrates, Connecticut continues to move toward recovery and economic growth. However, we need to work harder to balance the state's books and to extend the recovery to those who have not yet benefitted. The report highlights my concerns regarding state finances, which appear in the Budget Watch List. In addition, I have identified a number of areas in which my office can take the lead in 1997 to improve the lives of Connecticut citizens.
I hope this report provides helpful information to our state's policymakers as we work together to improve Connecticut's future.
Sincerely,
Nancy Wyman
State Comptroller