Fiscal Accountability Report to the Appropriations and Finance Committees as required by CGS Sec. 2-­36b November 15, 2013 OFFICE OF FISCAL ANALYSIS Room 5200, Legislative Office Building -­0200 E-­Mail: ofa@cga.ct.gov www.cga.ct.gov/ofa Section 1: FY 14 FY 18 Budget Estimates and Assumptions for Appropriated Funds General Fund We are projecting a $117.1 million surplus for FY 14 (this amount represents about 0.7% of total estimated expenditures) and a surplus of $8.4 million in FY 15. However, based on a current services analysis, we are also projecting deficits ranging from $1,103.4 million to $1,436.5 million over the three fiscal years that will follow. Please see the table below for details. Budget Outlook (in millions) Estimated Expenditures Estimated Revenue Surplus/(Deficit) % of Estimated Expenditures FY 14 $ FY 15 $ FY 16 $ FY 17 $ FY 18$ 17,132.5 17,524.3 18,790.6 19,633.4 20,631.6 17,249.6 17,532.7 17,687.2 18,406.6 19,195.1 117.1 8.4 (1,103.4) (1,226.8) (1,436.5) 0.7% 0.0% (5.9%) (6.2%) (7.0%) Since PA 11-­48, as modified by PA 13-­239 and PA 13-­247, required Connecticut to transition to a GAAP1-­based budgeting method beginning in FY 14, the above projections are calculated under GAAP. A further explanation of GAAP can be found in Section 6 on page 34. Special Transportation Fund (STF) Projections for the STF indicate that the fund will experience a negative operating balance in FY 14 and FY 15, but will end FY 18 with a positive cumulative balance of $202.8 million. In FY 14, FY 17 and FY 18 expenditure growth is projected to outpace revenue growth. Major contributing factors to expenditure growth are: $60 million in Town Aid Road being bonded in FY 14 and FY 15 and then added back t million in FY 16, and an additional $0.7 million in FY 17 and FY 18, An increase of $21.8 million in FY 15, $6.0 million in FY 16, $5.9 million in FY 17 and $6.0 million in FY 18 for the State Employee Retirement System (SERS) and An increase in $19.4 million in FY 15, $26.2 million in FY 16, $40.5 million in FY 17 and $40.9 million in FY 18 for Debt Service. These expenditures are partially offset by the scheduled transfers from the General Fund to the STF by $2.1 million in FY 15, an additional $150.7 million in FY 16 and an additional $10.0 million in FY 17 through FY 18. 1Generally Accepted Accounting Principles. 1