Georgia could round out this fiscal year with a surplus. April’s 2.6 percent revenue spike is the tenth consecutive month of growth.
House Appropriations Chair Terry England says any extra money will go straight to the state’s reserve fund.
"Those revenues will end up going into the rainy day fund which is kind of like our insurance policy so to speak. It puts the state back on a fairly stable foundation. So if we do go back into a dip of some sort, we have cash sitting there so we can make adjustments with if necessary," says England.
Right now the rainy day fund has about $100 million in it. England says he hopes that will be quadupled at the fiscal year’s end in June.
Alan Essig with the Georgia Budget and Policy Institute says even though the state has cut billions of dollars over the years in education and healthcare programs, it’s important to restore the reserve fund to keep the state’s good bond rating.
"To maintain the triple A bond rating, the bonding agencies are going to want to see us increasing that [reserve fund amount]. And evetually we’re going to want to build up our reserves between a billion and a half and two billion dollars," says Essig.
Georgia’s triple A rating allows the state to negotiate low interest loans for infrastructure projects
Before the recession, Georgia had about $1.5 billion in reserve.