State Comptroller Nancy Wyman today projected the state will end the 2010 fiscal year with a budget surplus of $242.9 million – a $76 million jump since last month.
Higher sales tax receipts – the largest tax category after the income tax-drove the sizable increase.
After many months of double-digit declines, the sales tax began rebounding in March and has been producing average monthly gains of about 2 percent.
The rise in sales tax receipts is tied to a gain in jobs over the same time period, Wyman said.
Connecticut lost 103,000 jobs in the recession that began in March 2008, and has gained back almost 15,000 jobs since January.
Still, Wyman said, the sales tax is expected to bring in about 5 percent less revenue overall than last year.
“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.”
Wyman also cautioned that a $500 million deficit projected for most of the fiscal year was mainly eliminated not by revenue gains, but by deficit-mitigation measures that included federal stimulus dollars, deferral of payments to the state pension fund and one-time transfers of money from accounts including the Rainy Day Fund.
