State Will Now Borrow $646 Million, Instead of $1.3 Billion, in Current Fiscal Year

Posted on September 8, 2010. Filed under: Uncategorized |

Hey, I guess we should take it where we can get it, huh?

“Gov. M. Jodi Rell said Friday morning that the state surplus of nearly $450 million will prompt the state to borrow $646 million – rather than $1.3 billion – to balance the budget in the current fiscal year, which started on July 1,” the Hartford Courant blogged last Friday. “As such, the surplus from last year will be used to ease the budget crunch this year.”

At a time when so many people (especially those with any financial know-how!) are shaking their heads at the seemingly Monopoly-esque spending happening at both a federal and a state level, I feel we can breathe a small sigh of relief that we’re not borrowing against ourselves to the nth degree and throwing ourselves further into debt. Seems like a relatively good use of that surplus, all things considering!

It immediately begged the question in my mind, though… how, with all of the doom and gloom, did we possibly end up with a surplus of $449.4 million? Are we possibly making much ado about nothing, and we’ll all be fine?

It looks like there’s good news and bad news in that surplus, according to the Courant. So how’d we balance that budget?

· Almost $1 billion in stimulus funds

· Rainy day funds (hey, it’s there for a reason!)

· The “delayed payment of $100 million into the state pension fund” (uh-oh… see the July/August 2010 issue of Connecticut CPA article “Connecticut’s Post-Employment Benefits and Terra Firma” for more on that. A sneak peek of our members-only publication, just to show you how important that topic is!)

· “The spending in fiscal 2010 was 0.2 percent below the level of the 2009 fiscal year, a feat that is rarely accomplished in state government.” Kudos.

· And, of course, tax collections were “about $33 million short of budget expectations,” according to Wyman.

So, as always, there’s good news and bad in everything. What stands out to you? What makes you give Connecticut a pleased nod, and what has you shaking your head?

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