With the economy improving since the depths of the recession, the state is now expecting a surplus of nearly $243 million - up sharply in the past month.
Gov. M. Jodi Rell announced the new projections Tuesday, noting that the latest estimates are $76 million above the numbers last month. The improvements caught some by surprise because Connecticut residents have been hearing mostly bad economic news since the collapse of the Lehman Brothers investment bank and the major Wall Street downturn that started in September 2008.
"As our economy slowly recovers, the news continues to get better for our state budget and our taxpayers,'' Rell said in a statement. "We have three straight months of surplus and have added jobs in Connecticut in each of the last five months. People are going back to work, consumers are spending more and our revenues have begun to climb.''
Rell added, "Our state is now in a much stronger position to cut down borrowing. If these projections hold, we will be able to apply more than $100 million of that surplus to pay down our securitization debt. I have been adamant throughout budget negotiations that any and all surplus must be applied to debt payments."
The improvement of $76 million over last month includes about $59 million in tax collections that came in higher than expected and about $21 million in lower spending by state agencies. The collection of the state sales tax was $30 million higher than expected - meaning that many consumers are starting to spend again after the economic slowdown. Various fees, permits, and licenses came in at $12 million more than expected.