"I'm concerned. This negative balance is evidence that we are spending more than we're taking in. We've been doing it for a while, but this historically large negative balance demonstrates that it's getting worse," Treasurer Kennedy said. "In fact, the Department of Health and Hospitals just announced that we are already $171 million over budget in our Medicaid program with eight months to go in the fiscal year."
The end-of-the-month state general fund balance for October was a negative $925 million, forcing the Treasurer's Office to borrow from other funds in order to maintain cash flow. This was the largest negative end-of-the-month state general fund balance for that time period in five years. The fund balance on October 31 of last year was a negative $657 million. The end-of-the-month general fund balances for October 31 for each of the past five years were:
- 10/31/10 = -$181,531,912.38
- 10/31/11 = -$565,169,822.53
- 10/31/12 = -$476,665,313.52
- 10/31/13 = -$656,750,353.06
- 10/31/14 = -$924,645,525.00
Attached is a graph of actual general fund month-end balances for the past five years. The black line for FY14-15 shows the extent of the cash flow problem.
"We've had six years of midyear budget cuts. We've raided the Office of Group Benefits, the Medicaid Trust Fund for the Elderly, the Artificial Reef Development Fund and Lord knows how many others. We've diverted money from the Tobacco Settlement Trust Fund into the state general fund. We finished last fiscal year with a deficit. We're over budget in the Medicaid program. We have a spending problem, and we need to address it," Treasurer Kennedy said.