Gov. Dannel Malloy’s administration believes that Connecticut may have ended its fiscal year with a $35.7 million budget surplus, after several months of projecting a deficit of $390 million.
The $390 million shortfall was first reported in April. Malloy used his limited authority to cut spending unilaterally to lower that amount to $323 million; following additional spending cuts and transfers from off-budget accounts, and a large payment of corporate taxes in May, further decreased the gap to $107 million in June.
The 2016-17 fiscal year ended on June 30, but the comptroller’s office does not officially end its calculations until late September, as some tax revenues received during the summer are applied to the previous budget year.
If the surplus is ultimately confirmed, Connecticut would avoid tapping into its budget reserve for the first time in three years. The reserve currently stands at $235.6 million, about 1.3 percent of annual operating costs. Comptroller Kevin Lembo recommends a reserve of 15 percent.
The state posted a $113 million deficit in 2014-15 and a $170 million shortfall in 2015-16.