Connecticut (WTNH) – Comptroller Kevin Lembo announced today that the state is right on track to end the fiscal year with an $800,000 surplus. He did say that the volatile financial market thought could complicate the budget outlook for the 2016 fiscal year.
In a letter to Gov. Dannel P. Malloy, Lembo said he agrees with the Office of Policy and Management’s (OPM) estimates at this early point in the year – though he shares OPM’s concerns related to potential revenue shortfalls.
“The revenue accruals for Fiscal Year 2015 were not as strong as expected, and there is concern that this trend could continue into Fiscal Year 2016,” Lembo said. “There are also numerous revenue policy changes in Fiscal Year 2016, including an estimated $13.6 million in new revenue from the roll-out of Keno gaming, which will be carefully monitored in the coming months. Undoubtedly, revenues will be adjusted in future months as trends become better defined.”
The Fiscal Year 2016 budget also relies on $200.6 million in forced savings from state agencies, which Lembo said could be challenging given the savings extracted from agency budgets in prior fiscal years.
“The current volatility in financial markets has also complicated the budget outlook for Fiscal Year 2016,” Lembo said. “Over the past several years, the state has experienced significant fluctuations in capital gains related receipts.”
“The recent downturn in the market increased sales volume,” Lembo said. “It remains to be seen if the increase in gains related to sales will help to mitigate the negative impact of the present market decline.”
Pointing to a rebound in retail sales, automobile purchases and other indicators, Lembo said, “The fundamentals of the national economy continue to point to future economic growth.”