Governor Tapping Special Reserves For General Fund Support

Governor Beverly Perdue’s office has announced the state is transferring up to $300 million from several special accounts into a reserve to support the General Fund.

According to a release on Governor Perdue’s website, she is taking the steps to manage the current fiscal year budget shortfall.

One of the reserve funds tapped for money for the general fund support is the “Education Lottery Reserve Fund.”

The Charlotte Observer reported this weekend that Perdue has said she may use up to $88 million in lottery money to “shore up the state’s coffers.”

According to the Governor's new release, she is asking "Most state agencies for further reduction amounts from 7 percent to 9 percent. Governor Perdue will continue to protect public education as much as possible while managing the shortfall."

Below is information from the release on the Governor’s website as well as the breakdown of transfers. You can also click on the related link below to go to the news release on the Governor's website.

From Governor Perdue’s website:
"As a precautionary step to manage cash flow, the state will transfer up to $300 million dollars from several special accounts into the General Fund. The money will be put into a reserve and may be used to support General Fund obligations if necessary. These transfers will be managed so that existing activities supported by these special funds aren't impacted. The state annually faces cash flow issues between mid-February and April 15. The state's cash position is more heavily impacted this year because final corporate payments are now due by April 15, 2009, rather than March 15, 2009."

“'The state constitution requires that I balance the state budget, and I will do that while protecting public education as much as possible,' said Gov. Perdue."

Transfers, as listed on Governor's website:

From the Education Lottery reserve (current cash balance $50 million): $50 million

From the Clean Water Management Trust Fund reserve (current cash balance $251 million): $100 million

From the Public School Building Capital Fund reserve (current cash balance $316 million): $100 million

From the Public School Textbook Fund reserve (current cash balance $65 million): $50 million

Total reserve funds transferred $300 million out of current cash balance of $682 million

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