Connecticut is poised to end fiscal year 2014 with a $504.4 million surplus, Comptroller Kevin Lembo said.
Lembo’s estimate is in line with the Malloy administration’s most recent projection.
Revenue is up, due largely to unexpected gains in three tax categories: income, sales and corporate. The stock market has continued to post double-digit gains, fueling the increase in estimated income tax payments, Lembo said.
“The housing market in Connecticut is an economic bright spot,” Lembo said. The state’s real estate conveyance tax receipts are running 71 percent above the same period last fiscal year, he said, though he noted that the housing boom is leaving behind first-time home buyers.
State Comptroller Kevin Lembo said the state is on track to end fiscal 2014 with a $273 million budget surplus.
That’s an increase of 27.4 million over the amount Lembo projected last month. The comptroller, a Democrat, credited the increase to improvement in the state’s employment numbers, continued strength in the housing market and a stock market that’s riding high.
“Improvements in the state’s employment numbers, continued strength in the housing market, and strong equity markets are contributing to a more favorable revenue outlook as we enter 2014,” Lembo said.
Citing a tax amnesty program that pumped more than $175 million into the state’s coffers, Comptroller Kevin Lembo is projecting that Connecticut will end fiscal year 2014 with a $245.9 million surplus.
That’s about $110 million more than what the state Office of Policy and Management projected it would be.
In addition to the tax amnesty, Lembo credited the growing surplus on increases in state revenue: sales and corporation taxes are each up by $30 million from budget targets. The real estate conveyance tax is $15.6 million over initial estimates, he said.
“Month after month the state’s financial outlook for the current fiscal year is improving,” Lembo said.
While Lembo said the revenue boost is “a great sign for Connecticut’s economic recovery,” he also sounded a cautionary note to politicians who may be tempted to spend the extra cash.
“[T]here are…uncertainties and future liabilities that we need to brace for,” he said in a press release. “I strongly recommend that any General Fund surplus amount should be transferred to the state’s budget reserve fund at the close of the current fiscal year.”
The budget reserve fund, aka the rainy day fund, contained about $270.7 million, or 1.6 percent of planned spending, at the end of fiscal 2013.
“I have called for a reserve level of 15 percent of spending – beyond the 10 percent statutory requirement,” Lembo said. “It is essential to the state’s long-term fiscal stability that sufficient reserves be established as soon as possible. Too often in the past, opportunities to build reserves have been missed as other perceived budget priorities were pursued.”
Kevin Lembo, the state comptroller who sometimes clashes with the Malloy administration, stopped by to say he’s running for re-election as state comptroller.
A Guilford Democrat, Lembo served for six years as the state’s first Healthcare Advocate.
Have a listen:
Here, he notes that he’s playing for “the people’s team,” not merely the Democratic team:
Break out the nerd glasses: Democratic state Comptroller Kevin Lembo is running for reelection.
He will file paperwork with the State Election Enforcement Commission this morning at 10 a.m., said his communications adviser, Patty McQueen.
The filing will allow the campaign committee, Lembo 2014, to begin the process of qualifying for public campaign financing.
In a press release, Lembo said,
I have spent nearly 25 years working in the public sector, but it has been a distinct honor to serve in statewide elected office as Comptroller … While we have more work ahead to restore the state to economic prosperity, we are headed in the right direction. With the support of Connecticut voters, I hope to continue my work on their behalf.
HARTFORD – When it comes to gun rights and gay rights, Connecticut is often not the same as the rest of the country.
That became evident again Friday when U.S. Sen. Richard Blumenthal called upon the Republican House Speaker John Boehner to allow a vote on the federal Employment Non-Discrimination Act.
ENDA was passed by the U.S. Senate on Thursday by 64 to 32, including support by Blumenthal and Senators Chris Murphy of Connecticut, John McCain of Arizona, Kelly Ayotte of New Hampshire, and Orrin Hatch of Utah.
The bill was introduced 17 years ago in the U.S. Senate by Democrat Ted Kennedy, but it was never passed until this week. The measure is designed to prohibit employment discrimination based on gender identity and sexual orientation by businesses with more than 15 employees, as well as labor unions and employment agencies.
Boehner, who controls the agenda in the Republican-led House, says that the bill is unnecessary and will hurt small businesses.
“I’m very proud to be from Connecticut, where we’ve already recognized this principle,” Blumenthal told reporters Friday at the state Capitol complex. Continue reading
Connecticut played a pioneering role in advancing several key pieces of legislation related to families, including family and medical leave and paid sick time.
On Tuesday, U.S. Rep. Rosa DeLauro and other officials will gather in Hamden to highlight what they say is Connecticut’s role as a model for the nation.
“Connecticut has always been a leader on family-friendly workplace policies, from the passage of a state Family and Medical Leave Act, which led to a federal FMLA policy, to the first state paid sick days legislation in 2011, and now the creation of a legislative taskforce to study family medical leave insurance during the 2013 legislative session,” the Working Families party said in a press release announcing Tuesday’s press conference. The event is also being sponsored by the Connecticut Association for Human Services.
In addition to DeLauro, state Comptroller Kevin Lembo, Teresa Younger, executive director of the Permanent Commission on the Status of Women and Connecticut AFL-CIO Secretary-Treasurer Lori Pelletier are expected to attend.
Comptroller Kevin Lembo reports today the kind of news that Gov. Malloy has been longing for — the surplus is growing thanks to increases in state revenues and lower state spending. From Lembo’s office:
Of the surplus total, $220.8 million has been reserved for future fiscal year activity and $178 million will be deposited into the Budget Reserve Fund – or “Rainy Day Fund” – bringing the Budget Reserve Fund balance to $271.5 million.
“This payment is a great first step towards replenishing the Budget Reserve Fund,” Lembo said. “The ultimate goal for funding the Rainy Day Fund should be approximately $3 billion – or 15 percent of the current General Fund – in order to fully protect taxpayers against future economic downturns.
“The state’s surplus should be a sign of cautious optimism for the future – a good outcome, but potentially the result of one-time revenue windfalls. The growth was largely driven by strong stock market performance and an increase in the federal capital gains tax rate that pushed future year gains into Fiscal Year 2013. The payroll component of the income tax, which accounts for 60 percent of the total income tax receipts, was down slightly from last year.”
Prompted partly by unexpected money from wealthy individuals through estate and gift taxes, the state is now projecting a surplus for the last fiscal year of $312 million.
That surplus is calculated under generally accepted accounting principles, while the number would jump to nearly $360 million under the current method used by the state, which is known as a modified cash basis of accounting.
The fiscal year ended on June 30, but the final state numbers traditionally are not tallied until after Labor Day – in the same way that individual taxes are often calculated by April 15 for the previous year.
The surplus is being generated partly by better-than-projected tax collections – particularly in estate and gift taxes – and spending reductions that were approved by the legislature on a bipartisan basis shortly before last Christmas.
The legislature has already decided to spend about $220 million of the surplus by pushing that money into the current fiscal year, which started on July 1. The rest of the money would be placed in the “rainy day fund” for fiscal emergencies. Continue reading
State Comptroller Kevin Lembo has written Gov. Dannel Malloy to say that Connecticut ended the 2013 fiscal year last night with a surplus of close to $200 million, mostly thanks to revenue from the inheritance and estate taxes:
The state’s financial outlook has further improved this month – good news, but still showing reasons for caution because the most significant gains were potentially related to one-time revenue windfalls. The most significant revenue growth has occurred in the inheritance and estate tax, which is $269.8 million over budget.
Lembo noted that because $220.8 million of the state’s surplus is already committed to the upcoming budget, this will leave the state’s “rainy day fund” — a.k.a. the Budget Reserve Fund — with a balance of $109.3 million.