Gov. Pete Ricketts says he isn’t worried about dipping into the cash reserves to help close a nearly $200 million budget gap.
Ricketts has recommended both across-the-board and targeted budget cuts to close the gap, but also recommends transferring $108 million from the rainy-day fund.
“So, we have a cash reserve to help cushion us when we have revenue shortfalls and that’s what we have right now,” Ricketts tells reporters. “Our cash reserve with my recommendations will be at $274 million. That’s about middle of the pack if you look on a percentage basis compared to what other states are doing. So, when you’re looking at that, it’s a healthy cash reserve. It’s right, again, in the middle of the pack where other states are and, given our financial circumstances, I think that’s appropriate.”
State lawmakers face a $173 million revenue shortfall in the current state budget.
Ricketts recommends making $103.2 million in General Fund cuts, transferring $21.7 million from cash balances into the General Fund, and using $108 million from cash reserves to balance the budget.
The governor’s recommendations have gone to the Unicameral’s Appropriation Committee for consideration.
Ricketts says he’s reluctant to bring the cash reserves down to $274 million, but says he has a plan to build them back up.
“And then with continued spending constraints in the next biennium, if our revenues are growing the way the Legislative Fiscal Office predicts, we will have the flexibility to be able to bring that cash reserve back up to $500 million,” according to Ricketts.
Of the $103.2 million dollars in budget cuts recommended by the governor, $77.1 million would come from across-the-board budget cuts affecting most of state government. Ricketts’ recommendation spares public education as well as the Department of Correctional Services. There is a recommended increase contained in the governor’s recommendations. He recommends increasing the Child Welfare budget by $54.8 million to cover an unexpected drop in federal funding as well as an increase in the cost of services.