As tax revenues in many states begin to grow, governors and lawmakers face a choice in allocating the unexpected funds.
States may find paying off debt would be the best use for surplus funds. Beyond that, the decision involves rebuilding reserves or restoring budget cuts.
National Conference of State Legislatures recently found 21 of 29 states that are projecting surpluses intended to put all or part of the extra money into so-called rainy day funds.
Ohio is one of those states tasked with making the fortunate decision. Tax collections have risen, yielding about $350 million more than budgeted.
As a result, our state's budget stabilization fund has increased from a low of 89 cents to $246 million.
Basically, there are two views regarding use of rebounding revenues. One is to restore spending for programs and local governments before saving funds for the next recession.
The other view is to build the rainy day fund before committing to levels of support that would continue in future budgets - if the economy allows, of course.
If the recovery were more robust and dependable, the first option would make sense. But the shaky status of state, national and global economies is a good reason to pursue the latter option.
Plus, the governor and legislature can wait and see exactly how much revenue they get from state and local government's share of casino profits.
States are making a difficult choice when allocating surplus revenues, but not as tough as the choices required when revenues were shrinking.
The emphasis now should be on rebuilding budget reserves.
