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Comptroller Estimates $679.8M Surplus For 2011

by Hugh McQuaid | Jun 1, 2011 2:18pm
(5) Comments | Commenting has expired
Posted to: State Budget, State Capitol

Higher revenue from income, sales and inheritance taxes will help the state end the fiscal year with a General Fund surplus of $679.8 million, state Comptroller Kevin Lembo predicted Wednesday.

In his monthly letter to Gov. Dannel P. Malloy, Lembo said those revenue surges increased the projected surplus by $170.2 million at the beginning of May. It is $563.4 more than the surplus predicted at the beginning of April.

Lembo said revenue from income tax increased by $497.5 million, the sales tax increased by $177.1 million, the inheritance tax by $144 million and the corporation tax by $107.5 million.

“The income tax is showing its strongest gains in the estimated and final payment portion of receipts, both with double-digit growth rates,” he wrote.

In addition to increased revenue, spending estimates $68.4 million lower than last month’s contribute to the higher surplus, Lembo said.

With the extra money, the state will not have to issue economic recovery notes, he said. It also enables the legislature to repeal an assessment fee that has been imposed on Connecticut Light & Power ratepayers and is scheduled to be added to the bills of United Illuminating customers, Lembo said.

The CL&P surcharge, imposed in January and scheduled to end at the end of June, has generated $40 million for the state, Lembo said. He asked Malloy to think about refunding some of that money to ratepayers.

“I hope you will consider seeking legislative authorization to apply any remaining surplus toward rebating CL&P electric rate payers for the 0.379 cents per kilowatt hour surcharge imposed between January and June 30,” he wrote.

Lembo said he supported Malloy and the legislature in their efforts to repeal the economic recovery revenue bonds it sought to borrow and pay back with money from the Energy Conservation and Load Management fund and the surcharge on electric bills.

Click here for more background on that.

If the revenue increase is sustained throughout the next year it would give the state an opportunity to use surplus funds to pay down and debt and replenish the “Rainy Day Fund,” Lembo said.

The revenue growth is good news, he said, but it’s tempered by the state’s 9.1 percent unemployment rate and a decline in home sales in the first quarter of the fiscal year. Also, there is a projected $344.6 million General Fund agency deficiencies, Lembo said. The Department of Social Services accounts for $262 million of that figure, he said.

“As the economy has faltered, the Department of Social Services has seen dramatic caseload increases in basic support programs,” he said.

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(5) Comments

posted by: DrHunterSThompson | June 1, 2011  4:33pm

DrHunterSThompson

Yay! Yet another reason to vote NO!  It’s just everyday another reason! Thank you!

posted by: Not that Michael Brown | June 1, 2011  6:09pm

Vote “No” on what man.  The CL&P surcharge?

posted by: ... | June 1, 2011  7:40pm

...

I think we all know by now what HST wants to vote no on.

But once again, it is too bad HST is maybe missing out on the whole 400 million dollars Malloy did not get from the unions planned to be applied to this ‘surplus’ (even though there is a 1.5 billion being held off for a few years once GAAP accounting is applied), which cuts out a huge chunk of what is being reported by Lembo.

posted by: DrHunterSThompson | June 1, 2011  9:50pm

DrHunterSThompson

It’s a big surplus, it’s revenue enhancement, it’s $117 million extra in the retiree health account, it’s Consolidations that are saving money, it’s nearly a $ billion in extra cash in the budget, it’s increased tax estimates, it’s simply more revenue and less expenses over the next 2 years.

Employees can now feel relieved, vote NO! in good conscience.

posted by: Not that Michael Brown | June 2, 2011  7:48am

To HST.
Ah yes.  Thank you for your new found concern for union employees.