Rainy Day Fund


Also found in: Acronyms.

Rainy Day Fund

1. In the United States, savings put aside by individual states to pay for services when revenues fall below expenditures. That is, when the state is required to spend money in excess of its tax and other revenue, it may use the rainy day fund to make up the difference. States put a certain percentage of their budget surpluses into their rainy day funds. Rainy day funds are especially important for states that have balanced budget amendments in place.

2. More broadly, any savings especially set aside for a specific purpose.
References in periodicals archive ?
Why States Save: Using Evidence to Inform How Large Rainy Day Funds Should Growexamines budget stabilization funds-often called rainy day funds-and offers recommendations to determine optimal savings goals and create enhanced budgetary flexibility over the course of the ups and downs of economic activity.
The Rainy Day Fund, which consists largely of revenue from oil and gas taxes, was created in 1988 as a piggy bank to be used in case of state funding emergencies.
Senate Bill 415, a bill that would deposit the entire $15 million surplus into the Rainy Day Fund, will likely be voted on by the entire House in the coming weeks.
Given the boom-and-bust nature of state finances, a case can be made that putting money into a rainy day fund is the most prudent course of action.
But having established a rainy day fund is not the most significant difference between Oregon and California.
The size of a state's rainy day fund would also be expected to have a negative association with fiscal stress.
However, at the end of the day, if we don't have that excess revenue, we can't raid the rainy day fund to adopt her legislation," Mr.
Under current law, the Rainy Day Fund has never reached its cap.
As state budgets have stabilized, rainy day fund balances have grown, even when accounting for Alaska and Texas.
With $89 million in the rainy day fund to protect against future economic downturns, we had a chance to make a strong case for pushing for the state to have a AAA bond rating, the highest around.
The political obstacles confronting both proposals show why it was so hard for the state to establish a rainy day fund in the first place.
And he also favors setting part of it aside for a rainy day fund.