Budget Director Ben Barnes announced Tuesday the state’s budget is projected to have a $500 million surplus by the end of fiscal year 2014.Â
The estimate is an increase of $232.9 million over last month’s estimate, and a stark contrast to $3.6 billion deficit that had been predicted previously.
The increase is primarily due to the success of the state’s recent tax amnesty program and increases in personal income taxes due to “extraordinary gains in the U.S. equity markets this past year, which were up 29.6 percent as measured by the S&P 500 index,” Barnes said in a letter to Comptroller Kevin Lembo Tuesday.
Lembo is expected to respond with his own projections Feb. 3.
Ahead of the 2014 legislative session, Gov. Dannel P. Malloy said the current budget growth rate of 2.8 percent is at the lowest level in decades.
The growth rate was 4.7 percent between 1996 and 2005, and 4.2 percent between 2006 and 2011.
“Today”™s letter highlights the continued progress we have made in turning a record-setting $3.6 billion deficit to a surplus of more than $500 million, while at the same time making smart investments to improve our education system and grow jobs,” Malloy said in a written statement.
“Overall, the rate of budget growth under this administration is lower than those of my predecessors,” he added. “For too long, our state had been putting off the tough decisions needed to get our fiscal house back on track and keep it there. While the work isn”™t done yet and we must continue working to improve the state of our state. Thanks to the efforts of many people in our state, we”™re seeing progress.”
