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 eight of the last nine years, the state has borrowed $1.2 billion at the beginning of the fiscal year that is paid back with interest at the end of the fiscal year. As shown in the following chart, the state had a positive cash balance in its major funds until fiscal year 2002, but from fiscal year 2003 through fiscal year 2010, has borrowed each year, resulting in negative cash balances. At the end of fiscal year 2011, the cash balances returned to positive territory, at $1.0 billion.