Budgets and Bumblebees: The Rise and Fall of the State Surplus [The Hartford Courant]

Hartford Courant

Keeping track of official estimates of Connecticut’s state surplus over the past few months has been a little like attempting to describe the flight of a bumblebee: It’s down, it’s up, down, and there it goes, up again.

And all those swerves and swoops, even if they appear rather dramatic at the moment, probably don’t mean that much in the end.

Gov. Dannel Malloy’s budget experts announced Tuesday that the state ended its 2013-14 fiscal year on June 30 with a budget surplus of $121.3 million.

That’s considerably higher than the state Comptroller’s Office estimate of a $33.2 million budget surplus that came out at the beginning of this month. And that early July surplus guesstimate was $75.5 million below what the budget gurus were expecting back in May, and way, way beneath the $500 million surplus projected several months earlier.

All these ups and downs are essentially little more than blips for a $19 billion budget operation, variations that can be influenced by a host of different factors.

Sales tax collections can increase or decline due to weather or consumer confidence. Corporate, income and capital gains taxes can rise and fall as well, and are often altered by the course of Wall Street’s fortunes. Even the sudden death of a very wealthy Connecticut resident can mean tens of millions of dollars in estate tax revenue officials hadn’t planned to get.

Surplus and deficit projections can also change as a result of more or less spending by state agencies.

Last year’s surplus ended up at $270.7 million, or about 1.6 percent of that year’s budget. If this
year’s surplus comes out to $121.3 million – and that’s won’t actually be known until October – it would amount to less than .2 percent of this year’s budget.

Malloy, who is running for reelection this year, was promoting the fact that the surplus will be deposted in Connecticut’s budget reserve or “Rainy Day Fund.” He also noted that this will be the third year in a row that the state has put money into its reserve account, which now amounts to $392 million.

“Depositing this surplus into the Rainy Day Fund, combined with our efforts to limit spending, are just a few ways that we are taking responsible steps to restore the fiscal health of our state,” Malloy said in a statement.

Republicans, of course, take a very different view.

Sen. Len Fasano, R-North Haven, scoffed at Malloy’s surplus estimate Tuesday.

“Why stop at only a $121 million surplus,” asked Fasano, who is one of the top GOP Senate leaders. “Why not bond for more expenses? Why not move more money away from the Special Transportation Fund? Why not employ every tactic we can think of to grow the Rainy Day Fund without cutting expenses, and then pretend to be a fiscally prudent state?”

The almost-final number on what this year’s surplus actually was won’t be known until the State Comptroller’s Office issues it’s end-of-year finding in early October. And no money can be put into the Rainy Day Fund until after the state’s official budget audit is completed in December