State government is on pace to close the books on the last fiscal year $393.3 million in the black – $260 million higher than the surplus projected when the new budget was adopted in early May – Gov. M. Jodi Rell’s administration reported today.

The latest surplus projection, which also stands about $150 million above the administration’s estimate one month ago, stems from modest improvements in sales and insurance industry taxes and in revenue from licenses, permits and fees.

The new surplus, if confirmed by state Comptroller Nancy Wyman, would enable state government to reduce planned borrowing to support this fiscal year’s $19.01 billion budget from $956 million to $702 million. Rell insisted during budget negotiations this past spring, when the 2009-10 surplus was projected at $139.3 million, that any further surplus growth be used to reduce borrowing.

Though the 2009-10 fiscal year ended on June 30, various taxes continue to accrue over the summer and Wyman will not officially close the books on the fiscal year until October.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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