State & Local Government Policy, Business and Technology

States Make More Progress Rebuilding Rainy Day Funds

Route Fifty: A decade after the Great Recession began, at least half of the states could cover a bigger share of spending with rainy day funds than before the downturn. But most still had a thinner cushion against budget shortfalls in their total balances, which count rainy day reserves plus general fund dollars left over at the end of a budget year.

In fiscal year 2017, the 50-state total for rainy day funds increased for a seventh straight year to a record $54.7 billion, enough to run government operations for a median of 20.5 days, also a new high. Early estimates showed savings at near-peak levels in fiscal 2018, which ended in June for most states. The results will probably rise once missing and final data are counted in a year in which higher-than-expected tax revenue led a number of states to increase savings beyond their earlier estimates.

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