Official says Connecticut can skip debt sale

NEW YORK (Reuters) – Connecticut should skip a $646 million sale of economic recovery notes and instead rely on a revenue surge that will give it a year-end surplus of $680 million, the state comptroller said on Wednesday.

Connecticut had been planning to sell notes backed by utility surcharges. Comptroller Kevin Lembo, in a statement, urged legislators to refund the $40 million collected since January from residents’ electricity bills for this purpose.

Most states are receiving higher revenue as their economies recover, though for many, the collections are still below pre-recession peaks.

In the first quarter, states’ tax collections climbed 9.1 percent from a year ago, the Rockefeller Institute of Government said in a report last week.

Connecticut’s revenue rose $170 million from last month’s forecast, Lembo said. “It is vital to Connecticut’s long-term fiscal stability that future surplus revenue be applied towards paying down debt and rebuilding our budget reserve,” he said in a statement.

Treasurer Denise Nappier last week also said the legislature should cancel the planned offering of economic recovery notes due to the growth in revenue.