Bolstered By Wall Street Earnings, Stimulus Spending, Connecticut Budget Surplus Grows
Connecticut’s new revenue consensus figures from April show the state on track to end its fiscal year on June 30 with a $250 million budget surplus. That’s higher than had earlier been anticipated.
Comptroller Kevin Lembo says the increased revenue has been generated from high earners on Wall Street and higher sales tax revenue due to the most recent federal stimulus package.
“The good news is that — some of the money that came from the feds to Connecticut families and families across the country — people put those dollars to good use. They did a third in debt relief, a third in savings and spent a third. So that has a stimulative effect,” Lembo said.
Lembo is cautiously optimistic that Connecticut’s projected budget surplus might grow even more by the end of the month. He said that’s because federal and state tax filing deadlines were pushed back from April to May this year, and many taxpayers who owe money might wait until the May 15 deadline to file their returns.
Governor Ned Lamont said the windfall in addition to $6 billion in federal relief funding coming to Connecticut means there’s no need for new taxes to balance the state’s next two-year budget that he’s negotiating with lawmakers.
“We’ve got pretty good revenues right now. We’ve got a strong position as a state. We have three-plus billion dollars in our rainy day fund. This is no time to talk about the need to raise taxes when we really need to be talking about investing the money that we have to make a difference in peoples’ lives," Lamont said.
Democrats who control the legislature have proposed a new consumption tax and a higher tax rate on the income and investments of the wealthy. They say the money is needed to fund a variety of new programs that include a $600 per year child tax credit and more benefits to the state’s poorest families.
Lamont and lawmakers need to reach a budget agreement before the end of session on June 9.