Educators Prod Lawmakers To Loosen Hold on Cash Reserves

By Drew Lindsay

States with surplus cash are stashing it in "rainy day" accounts or moving it to next year's ledgers, raising complaints from some education leaders that the money should go to schools.

Revenues flowing to many state coffers have outpaced expectations this year, thanks to conservative budgeting and the economic boom in many areas of the country. While some of this money is finding its way into school budgets and other programs, many states are setting aside most of the cash as insurance against the lean times they see ahead.

Michigan, for example, is sitting on budget reserves of about $1.1 billion, a record high for that state and the largest amount this year in the...