Connecticut state Comptroller Kevin Lembo is projecting a $126.1 million surplus for the state in fiscal year 2020.
In offering his forecast via a letter to Gov. Ned Lamont, Lembo noted that fiscal year 2019 year-end adjustments were still being processed and could have a “significant impact” in the final report for that year. Lembo added that he plans to release his preliminary reporting of unaudited operating results for fiscal year 2019 on Sept. 30.
In looking ahead to 2020, Lembo said his forecast matched the outlook issued by the Office of Policy and Management, which determined a $15 million decrease from the initial budget plan owing to a deficiency in the nonappropriated adjudicated claims account.
“Our early surplus projection for fiscal year 2020 should be treated with cautious optimism, because while there are positive early trends, they are just that – early,” Lembo said. “It should also be noted that Connecticut’s budget results are ultimately dependent upon the performance of the national and state economies. For now, economic indicators for the national and state economies are sending mixed messages, with some positive movement on income tax revenue and home price appreciation among lower-price tiers – but also some trends in the bond market that could be recession indicators.”
Lembo also called for budget reserve fund legislation that would mandate a more disciplined approach in setting aside unanticipated revenue windfalls for use against future recessions, thus sparing the need for tax hikes and state program cuts during an economic downturn.