Major Fund Cash Balances

Why it Matters: Positive cash balances help state government minimize borrowing costs and meet current obligations. For several years, state government has not maintained sufficient cash balances in its major funds (the General Fund and School Aid Fund) in order to make scheduled payments. As a result, in nine of the last ten years, the state has borrowed approximately $1 billion at the beginning of each fiscal year that is paid back with interest prior to the end of the fiscal year. The cash position improved in fiscal year 2012 to the point that such short-term borrowing was not necessary and the major funds ended the year with cash balances totaling $1.6 billion.