State of Maine ends fiscal year with $175.8 million surplus, financial reserves of $316.2 million, according to a July 30 news release from the Maine Dept. of Administrative and Financial Services.

Maine concluded fiscal year 2018, which ended on June 30, with an unappropriated surplus of $175.8 million.

Commitments from this balance occur as follows:

$74.6 million carried forward as part of FY19 budget

$350,000 to restore the Governor's contingent account

$1 million to the Loan Insurance Reserve Fund

$2.5 million to the Reserve for General Fund Operating Capital

$2 million to reduce the Unfunded Actuarial Liability in the Retiree Health Insurance Fund

In addition to these payments, State Controller Douglas Cotnoir issued final priority reserve transfers to both the State of Maine's Budget Stabilization Fund (BSF) and Tax Relief Fund for Maine Residents. The funds received transfers of $76.2 million and $19.1 million, respectively.

The current balance of the BSF is $272.9 million, while the Reserve for Tax Relief stands at $28.4 million. The Reserve for Operating Capital, which received $2.5 million, has a current balance of $14.9 million. In all, the State carried financial reserves totaling $316.2 million into the new fiscal year.

The State of Maine's cash reserves and financial management should allow the General Fund to operate throughout fiscal year 2019 without internal borrowing or other mid-year adjustments, the department said.

The Budget Stabilization Fund was created in 2003. The Fund replaced the Rainy Day Fund, which was created by the Legislature in 1985 to prepay outstanding General Fund bonds and to support major construction projects.

The Budget Stabilization Fund acts as the State of Maine's savings account. It is a reserve balance that is set aside in good economic times to protect the state budget from the volatile changes in revenues that can occur when the economy unexpectedly slows. The goal of the Fund is to reduce the effect on the operation and services of state government and prevent policymakers from increasing taxes during sudden economic downturns.