State Budget In The Black
The state budget is in better shape this November than it was last November, according to state Comptroller Kevin Lembo’s monthly letter to Gov. Dannel P. Malloy.
In 2012, the state was running a $60.1 million deficit on Nov. 1. By the end of the month it had ballooned to $365 million — a number that forced the General Assembly to return for a special session in December.
This year the state is running a surplus of $11.2 million, an increase of $6.8 million over last month.
“If the current trends continue through the fiscal year, the state will likely meet its budget targets,” Lembo said. “The outlook is generally positive — both in revenue performance and spending control.”
After adjusting for a transfer of $67 million in federal funds for uninsured hospital patients, the estimated budget savings will increase by $26.8 million.
The state will save about $10 million based on lower-than-expected interest rates on bonding. The Department of Children and Families will save another $14.8 million from lower-than-expected child placement costs.
Some of the savings will be offset by unanticipated spending. The state will pay $8 million to settle two large insurance claims. It also lost $3 million from lower casino reimbursements, and saw a $9 million shortfall in the state Education Department magnet school account.
Lembo was unable to offer much in the way of projections regarding the economy because many of the economic indicators used in his monthly report have been delayed by the federal government shutdown. The U.S. Bureau of Labor Statistics has indicated that the employment numbers for September will be released with the October numbers on Nov. 22.
For the 12 month period ending in August, the state added 15,400 payroll jobs, including a loss of 6,000 jobs in the month of August. It was the first monthly employment loss after five consecutive months of job gains.
“The September and October job numbers will be especially important to the trend analysis,” Lembo said in his letter to Malloy.
The state’s unemployment rate was 8.1 percent in August compared to the national rate of 7.3 percent. According to the Connecticut Labor Department, the state has recovered 62,200 of the 121,200 jobs lost during the 2008 recession.