§ 99614 Loan Interest Payment Rules

• •If the state borrows money from a special account to help with certain programs, the interest on that loan must be paid from the General Fund.
• •The money for these interest payments is automatically set aside from the General Fund—no extra approval is needed.
• •These interest payments don’t count toward the state’s usual spending limits because they’re considered debt payments.

Imagine the state needs money to fix schools but doesn’t have enough in the school fund. So, it borrows money from another account, like a savings account.

The state has to pay back the interest on that loan, and the money for the interest comes from the General Fund (the state’s main bank account). The state doesn’t need to ask for permission every time to pay this interest, and it doesn’t count against the state’s normal spending rules.