January 5, 2010
|Final December 31, 2009|
|State Funds Available Start of Business (Cash-on-Hand)||$506.4 million*|
|Total Payments Made on December 31||$640.5 million**|
|Total State Funds Collected on December 31||$1.4 billion***|
|Final State Funds Available End of Business on December 31 (Closing Balance)||$1.2 Billion****|
|*Amount of cash-on-hand to pay bills morning of December 31
**Vouchers paid on December 31
***Tax, federal and misc. receipts from agencies received on December 31
****Amount of cash on hand after paying bills and receiving revenue on December 31
Actions Taken by State to Get through December:
A Negative General Fund Balance
When the state’s General Fund has a negative cash balance, it puts the state in the position of borrowing from other state funds to pay its bills. Because the state’s General Fund ended December with negative $577 million balance, the state will need to make up the difference in January, February or March or take some other actions or it will end the year in the negative.
The General Fund is the major operating fund of the state. It is comprised of all non-dedicated revenues and includes the state’s major reserve funds. Money from the General Fund is used to pay for state operations and local assistance. The General Fund is a component of the state’s Short Term Investment Pool (STIP) or cash-on-hand. STIP is made up of All Governmental Funds (including the General Fund, state and federal special revenue funds, state and federal capital projects funds and debt service funds) and enterprise and internal service funds. These funds are invested temporarily until needed.
Last April when the state budget was adopted, it was anticipated that the state would face cash flow problems in the coming year. Therefore, a provision was included in the budget that allows the General Fund to borrow from other funds in STIP for a period not to exceed four months or until the end of the fiscal year, whichever is shorter, to meet its obligations in the event of a cash shortfall. Previously, temporary loans from other funds in STIP were allowed, but had to be paid back within the same month, preventing the General Fund from ending the month in the negative.
The State Comptroller’s office processes approximately 130,000 state payments daily. In State Fiscal Year 2008-09, it processed more than 34 million payments totaling approximately $103 billion.