A slightly stronger economy has given state policymakers a bit more breathing room when it comes to this year’s budget.
According to officials, Connecticut ended fiscal year 2010 on June 30 with about $150 million more in tax revenues than anticipated.
It’s not a “surplus,” but those extra revenues will allow the state to borrow less in order to balance the books in the current (2011) fiscal year.
Policymakers agreed to borrow nearly $1 billion to cover this year’s spending commitments and avoid cutting any more state spending or increasing taxes.
Borrowing at that high a level was a controversial move, given anticipated deficits of more than $3 billion in each of the next two fiscal years.
“The state of Connecticut does not have a ‘surplus’,” says CBIA Economist Pete Gioia. “What we have is less of a deficit, given higher-than-expected tax dollars, which will mean less borrowing. We are far from out of the fiscal woods because of a slowly growing economy.”
Though economic recovery continues this year statewide and nationally, we are not experiencing a self-sustaining jobs turnaround. Connecticut lost 101,000 jobs in the recession and is not likely to recover them all, says Gioia, before 2015.
Still, Connecticut has now had six consecutive months of job growth. The June jobs report showed that after losing 3,500 temporary government census jobs, the state still posted a net gain of 500 jobs—reflecting the strongest month for private-sector jobs in more than two years.
What’s more, many segments of the state’s labor market showed some growth, meaning Connecticut’s jobs recovery is starting to become broad-based. According to Gioia, it is very possible that we will see net job gains in every month between now and 2012.
For more information, contact Gioia at 860.244.1945 or email@example.com.