Comptroller Sean Scanlon Projects $448.4 Million Surplus, Highlights The Impact Of Prediction Markets

August 3, 2026

(HARTFORD, CT) – Comptroller Sean Scanlon today, in his monthly financial and economic update, projected a Fiscal Year 2026 General Fund surplus of $ 448.4 million and a Special Transportation Fund surplus of $16.9 million, both in general agreement with the Office of Policy and Management’s projections.

“Connecticut’s fiscal discipline continues to pay off, putting us on track to end another year in surplus,” said Comptroller Scanlon. “National and global uncertainties remain, but we have put in the work of building our reserves, reducing our debt and positioning ourselves to not only weather the unexpected – but to push forward new investments in education and economic growth to make our state more affordable.

“Prediction markets are literally everywhere and are used to bet on anything which, to me, warrants a lot more attention from government but also all of us in society generally,” said Comptroller Scanlon. “For this month’s Economic Update, we did a deep dive into popular prediction sites like Kalshi and Polymarket and looked at some of the real questions surrounding these platforms as they grow in popularity and play a role in shaping our daily life and economy.”

This month’s Economic Update spotlights prediction markets, which are gaining popularity, but run afoul of Connecticut’s legal gambling and sports betting platforms. These platforms provide odds information and new hedging opportunities for businesses, but also have a dark side, including misleading ad campaigns that target underage young people, insider trading and a lack of other consumer protections, not to mention that most people are losing their money. Scanlon’s update also highlights economic trends, including Connecticut’s markets for office space, labor force participation and the housing market.

In his monthly update to Governor Ned Lamont, Comptroller Scanlon noted that this month’s surplus projection is $36.7 million higher than last month and $139.3 million more than budgeted. Estimated revenue decreased this month by $41 million due in large part to a $159.6 million reduction in federal grants revenue due to a timing shift in receipts that pushes revenue into fiscal year 2027.

The revenue decrease was largely offset by upward revisions in other revenue and a reduction in expenditure projections, especially for debt service. Compared to last month, revenue projections increased for the Income Tax Estimates and Finals by $39.1 million, the Pass-through Entity Tax by $54.4 million, the Corporation Tax by $30 million and the Sales and Use Tax by $40 million. Meanwhile, refunds in taxes were reduced by $23.2 million and expenditure projections were reduced by $77.7 million compared to last month.

The Budget Reserve Fund (BRF), also known as the “Rainy Day Fund,” is at its statutory cap of $4.33 billion for Fiscal Year 2026 (18% of net General Fund appropriations). The BRF is projected to receive $1.43 billion from the volatility cap deposit and $448.4 million from the General Fund surplus with the close out of Fiscal Year 2026. After temporarily reaching $5.79 billion (23.3% of Fiscal Year 2027 General Fund appropriations), funds above the 18% cap (estimated at $1.31 billion) will be transferred to reduce pension debt during the closeout of that year.

The Early Childhood Education Endowment has already received a transfer of $411.7 million as part of the Fiscal Year 2026 closeout.