Comptroller Kevin Lembo has announced an updated forecast for a projected a General Fund surplus of $894.7 million for Fiscal Year 2022.
Lembo cited the impact of federal grants, particularly in Medicaid reimbursement and support for health and community-based services, improving forecasts for sales tax revenues and rising employment levels as the fuel for this surplus.
“Connecticut’s economy continues on its upward trajectory,” said Lembo. “The state budget appears to be in good shape for this fiscal year and, if current projections hold, another large payment should be available to pay down pension debt for the third consecutive year.”
Nonetheless, Lembo warned that the declining availability of affordable homeownership and rental housing coupled, with high inflation and a drop in the number of government education jobs could undermine any progress being generated within the state.
“I also want to caution that this level of federal aid cannot be depended on in future budget years and lawmakers should plan accordingly,” he added.
Lembo is also projecting another large deposit into the state’s Budget Reserve Fund ”“ also known as the Rainy Day Fund ”“ of approximately $1.7 billion. He noted that because the fund has reached its statutory cap of 15% of net General Fund appropriations, the additional money would be used to pay down the state’s pension debt for the third consecutive year.
“This smart fiscal policy continues to generate huge benefits for taxpayers,” said Lembo. “If these projections hold, we’ll be able to erase another huge portion of the pension debt that has been consuming more and more of the state’s budget in recent decades, easing the burden of past bad decisions on future generations.”
