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Monday Map: Rainy Day Fund Balance as a Percent of Annual General Fund Spending (Fiscal Year 2013)

2 min read

Last week’s Monday Map showed the rainy day fund balances in each state prior to the beginning of the recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. in 2007. This week, we take a look at these rates for fiscal year 2013, and note some interesting changes that have taken place.

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In terms of improvement, Alaska continued to grow its rainy day fund and now has a balance equal to 211.16% of its annual general fund spending. Wyoming also improved from its 5th place ranking in 2007 with a rate of 12.73% to a 3rd place ranking in 2013 with a rate of 53.13%, and West Virginia moved from 4th place to 3rd place by increasing its rate from 13.59% to 20.91%. Perhaps the most notable jump came from the Lone Star State; Texas jumped from 40th place in 2007 with a rate of 1.07% to 4th place in 2013 with a rate of 18.58%.

In 2013, only Alaska, Wyoming, West Virginia, and Texas maintained rainy day fund balance rates above the estimated 18% safety zone (see last year’s study for details). However, many states are moving in the right direction. For instance, Michigan went from having a rate of 0.02% in 2007—the lowest ranking state aside from those with rates of zero—to the 11th best rate in the country at 5.63%. Colorado went from having a rate of 0.00% to a 19th place ranking at 4.29%. Also, South Carolina went from 34th at 2.56% to 10th at 6.04%. Although these rates are a far cry from 18% and fall below even the lower end of the spectrum of expected revenue shortfalls during an economic downturn (13%), they are nevertheless a significant improvement from 6 years ago.

Unfortunately, some states’ fund balances are looking a bit worse for the wear. Albeit small, New Jersey nevertheless had a rate of 1.64% in 2007, but joins 6 other states with a rate of 0.00% in 2013. Wisconsin has also fallen into this group since 2007, along with Pennsylvania (the others are Montana, Illinois, Kansas, and Arkansas).