The state’s budget office is projecting a $126.1 million surplus for the fiscal year that began July 1, but that figure is almost certain to change in the months ahead.
For one, changes in the economy, spending patterns and other factors will impact the forecast.
Another uncertainty, according to the Office of Policy and Management’s first fiscal year 2020 budget projection, is a pending legal settlement between the state and the Connecticut Hospital Association.
Hospitals sued the Department of Social Services four years ago, challenging the state’s health provider tax.
OPM Secretary Melissa McCaw wrote Tuesday to Comptroller Kevin Lembo about her forecast, noting that the projected surplus is down from a $141.1 million balance anticipated by the state budget signed by Gov. Ned Lamont in late June.
Adjudicated claims are the reason for the dip, McCaw wrote. Projected revenues were unchanged.
However, the projections don’t include the impact of a potential settlement of the hospital lawsuit. McCaw noted that lawmakers set aside $30 million in this year’s budget for a potential settlement.
In a July 11 Superior Court filing, the state’s attorney informed the court that a settlement is pending.
“The parties have tentatively reached an agreement to resolve the litigation, but they need a number of months to commit the agreement to writing and obtain the necessary administrative nad legislative approvals to finalize the agreement,” Sarah Chaudhry wrote.
