Free Response - District Court of Connecticut - Connecticut

·M°“““y&§ESr:l?0*§="69‘0tf`§§‘1¥}?xi}‘Efl **151330 1i1°éli’1 101 -2 Flléd 06/00/2006 Page 1 iiigf 1 of 2
$*6; co A eo}?
6 "
STATE OF CONNECTICUT
NANCY VVYMAN OFFICE OF THE STATE COMPTROLLER MARK OJAK'AN
eompmotrsa 55 ELM STREET onzpurv eompmorrea
HARrFo1=zo, connecticut 061061776
April 1, 2003
The Honorable John G. Rowland
Governor of the State of Comiecticut
State Capitol
Hartford, Connecticut 06106
Dear Govemor Rowland:
In accordance with Section 3-115 of the General Statutes and with my duty to render all public accounts
under Article IV, Section 24, of the State Constitution, I am submitting the financial statements as of
February 28, 2003.
The Office of Policy and Management (OPM), pursuant to Section 4-66 of the Cormecticut General
Statutes has submitted budget estimates for Fiscal Year 2003 that proj ect a General Fund surplus of
$15,175,000 and a Transportation Fund balance of $l29,725,000. In accordance with existing statutory
requirements, the financial statements attached hereto reflect OPM's projections. The OPM estimates
incorporate both the deficit mitigation provisions of PA 03-2 and your proposed elimination of funding
for unsettled labor contracts. I am estimating a Fiscal Year 2003 General Fund deficit of $47,464,000
and a Transportation Fund balance for this Fiscal Year of $129,725,000. My estimates account for the
deficit mitigation provisions of PA 03-2; however, I have not included your proposal concerning
unsettled labor contracts as this recommendation is still under consideration by the legislature and is
subject to modification. In its current form, your proposal would reduce funding for unsettled contracts
by approximately $45.2 million and would lapse that funding in Fiscal Year 2003.
I reported to you by letter dated September 3, 2002 that the Fiscal Year 2003 General Fund deficit
exceeded one percent of the fund's appropriations. Connecticut General Statutes, Section 4-85(b)(2),
required you to submit a deficit mitigation plan to the legislative committees designated in statute by
October 3, 2002. On December 6, 2002, you submitted a comprehensive deficit reduction plan for Fiscal
Year 2003. The enactment of PA 03 -2 brings the General Fund deficit projection below the statutory
level requiring additional deficit mitigation initiatives for Fiscal Year 2003.
In the absence of PA 03-2, my Fiscal Year 2003 General Fund deficit estimate would have risen by $9.5
million this month from $638.2 million to $647.7 million. The slight increase in these figures results
from a modest downward adjustment in net revenues and a slight rise in agency deficiencies.
The provisions of PA 03-2 combine to provide an estimated $600.2 million in General Fund deficit
mitigation in Fiscal Year 2003. The act provides a projected $392 million in additional revenue,
approximately $70.1 million in fund transfers to general operating revenue, and $138.1 million in
spending reductions.
http://www.osc.state.ct.us/2002monthly/february/letter.htm 2/23/2006

"°““"Yé§é‘§‘:·fR>§1%1‘Ebb‘2’2?¥R€/‘€d A©8¤l1r?1%(?1i 101 -2 Filed oa/09/2006 Page 2 E?}-2° 2 Om
The economy continues to provide mixed signals regarding the potential for revenue increases driven by
economic growth. For the first time in five months, January job figures showed growth in payroll
employment. In January, payroll employment in Connecticut edged up by 1,900 positions. However, the
unemployment rate also continued to rise increasing one tenth of a point to 4.8 percent. Advanced
monthly retail sales in February were down 1.6 percent from a month ago, and the consumer confidence
index fell to its lowest level since October of 1993 for the week ended March 18th - before the start of
the war. In February the housing market, which had been a bright spot throughout the recession, showed
signs of weakening with a drop in new home sales in the New England region; however, housing
permits for Comiecticut actually increased 4.7 percent in January from a year ago. The stock market also
continues to send mixed signals. The revenue increases reported this month result from the revenue
enhancement provisions of PA 03-2, not from underlying economic growth.
Agency deficiencies increased a modest $3.8 million this month to $138.95 million. The net agency
deficiencies are: Department of Social Services $94.1 million, Mental Health and Addiction Services
$1.9 million, Department of Children and Families $11.8 million, Workers' Compensation $6.5 million,
State Employees Health Services $5.2 million, and Retired State Employees Health Services $8.7
million, State Insurance and Risk Management Board $1.2 million, Department of Mental Retardation
$6.1 million, Department of Corrections $3.3 million, and the Military Department $.15 million. My
office submitted accurate Fiscal Year 2003 budget requirements for both the active and retired
employees health accounts; however, my request was not fully funded resulting in the present
deficiencies in the two accounts. It should also be noted that, while this letter incorporates the OPM
estimate for these accounts at this time, my office is continuing to review the accounts and may revise
the deficiency figures in the coming months. Miscellaneous payments from the resources of the General
Fund increased $2.3 million this month.
The Transportation Fund budget as passed by the legislature anticipated a Fiscal Year 2003 surplus of
$190,238,000. It is estimated that adjustments will reduce the Transportation Fund balance by a net
$60,513,000 bringing the balance to $129,725,000. The transfer of $52 million from the Transportation
Fund to the General Fund in accordance with PA 03-2 largely explains the reduction.
The General Fund projection contained in this report is prepared on a modified cash accounting basis.
My office also prepares an amiual financial report in accordance with Generally Accepted Accounting
Principles (GAAP). The cumulative GAAP General Fund deficit as of June 30, 2002 was $944 million.
The difference between the budgetary and GAAP basis projections is primarily due to the recognition
under GAAP of proj ected liabilities, revenues, and other items which will be outstanding at year end and
which are not reflected in the modified cash basis currently used for budgetary reporting. The
recognition of these adjustments under GAAP results in a more accurate statement of the General Fund's
financial position.
If you have any questions, I will be pleased to discuss this report at your convenience.
Sincerely,
Nancy Wyman
State Comptroller
Back to Monthly Letter Index
Back to Comptroller's Home Page
http://www.osc.state.ct.us/2002monthly/february/letter.htm 2/23/2006