State budget surplus grows slightly to $167M

The projected state budget surplus has crept slightly higher to nearly $167 million with less than six weeks left in the fiscal year, Gov. M. Jodi Rell’s office announced this afternoon.

The Office of Policy and Management reported in its monthly letter to Comptroller Nancy Wyman that the $18.64 billion budget for 2009-10 now stands $166.9 million in the black. That’s $26.9 million higher than administration officials estimated one month ago, and $33.6 million above the surplus figure the governor and legislature are counting on to help prop up the next budget. That growth was attributed to modest increases in income and sales tax collections.

“There is no question this is good news for our state and for our beleaguered taxpayers,” Rell said.

The Republican governor added, however that, “no one is suggesting that all our fiscal problems are behind us. What we are seeing in the sales tax, for example, is a slowing in the rate of decline. … We still have much work to do before economic recovery for all is fully achieved.”

Rell, who is not seeking re-election, and the Democratic leadership in the legislature have been criticized by minority Republicans for taking few steps in the new $19.01 billion budget adopted for 2010-11 to reduce the monumental deficit the next governor and legislature are expected to inherit.

The legislature’s nonpartisan Office of Fiscal Analysis projects the 2011-12 budget faces a built-in deficit of $3.37 billion, an amount equal to nearly 20 percent of this year’s entire budget.

The 2010-11 budget – the final one of Rell’s tenure – relies on nearly $1 billion in borrowing to remain in balance, and imposes a new monthly surcharge between $2 and $3 on most residents’ and businesses’ electric bills to cover the debt.

It also is counting on the current year finishing at least $139.3 million in surplus, so that those funds can be transferred to support spending in the next budget starting July 1.