State Comptroller Nancy Wyman projected this afternoon that state government will have a $242.9 million surplus when it closes the books on the fiscal year that ended Wednesday.
That’s $76 million higher than the surplus the comptroller reported in her monthly assessment on June 1, and $103.6 million above the $139.3 million mark Gov. M. Jodi Rell and the legislature built into the new $19.01 billion budget to avoid tax hikes or further spending cuts.
This final surge in surplus was due largely to increasing sales tax receipts. After months of double-digit declines, the sales tax began rebounding in March and has been averaging 2 percent monthly gains since, Wyman said. Despite the recent surge, the sales tax still brought in about 5 percent less revenue overall in 2009-10 than it did in 2008-09.
“The sales tax picture is a good indicator of how deep of a hole the recession created in revenues,” Wyman said. “Even with the recent improvements, we still have a long way to go before we can call this a recovery.”
The rise in sales tax receipts is tied to a gain in jobs over the same time period. Wyman’s office reported Connecticut lost 103,000 jobs in the recession that began in March 2008, and has gained back almost 15,000 jobs since January.
Though job growth is increasing faster than most experts predicted, the unemployment rate remains very high at 8.9 percent, the comptroller added. In the 1990 recession unemployment peaked at 7.4 percent and in the recession of 2001 it peaked at 5.6 percent, she said.
The new budget stipulates that any 2009-10 surplus above the $139 million mark be used to reduce the nearly $990 million in borrowing Rell and the legislature built into the 2010-11 budget to avoid tax hikes or further spending cuts.
Though the last fiscal year ended Wednesday, the state will continue to receive income, corporate and other tax receipts tied to 2009-10 through the summer. The comptroller’s office won’t formally close the books on 2009-10 until Oct. 1.