Rainy Day Fund

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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 ?
POUND NOTES Two fifths of those surveyed said they had raided their rainy day funds A THIRD OF HOME OWNERS HAVE NO 'RAINY DAY' SAVINGS, SURVEY FINDS A THIRD (31%) of home owners have no "rainy day" fund for emergencies such as a boiler breakdown, a survey has found.
States' rainy day funds increased for a seventh straight year in FY 2017, to a record $54.7 billion total.
More recently Fine Gael and Labour even went so far as to raid workers' rainy day funds and actually stole money from their private pensions.
More than half of states have rebuilt their rainy day funds since the Great Recession, but fewer have been able to match the total balances they had before the downturn, Pew Charitable Trusts reports.
Legislation passed in 2015 allowed Hegar's office to put some rainy day funds in slightly higher-yielding investments, allowing the money to at least keep pace with the dollar's changing value.
MOSCOW, Muharram 14, 1437, Oct 27, 2015, SPA -- Russia says it will likely deplete one of its two rainy day funds by the end of next year as it tries to plug the state deficit amid the economic downturn, AP reported.
2012 rainy day funds Arkansas United States Have funds 37% 40% No funds 58% 56% Arkansas vs.
Holcombe and Sobel (1997) estimated that for states to have had large enough rainy day funds to avoid slower spending growth during the 1990-91 recession, they would have had to accumulate rainy day funds as large as 30 percent of their budgets.
In a 2005 policy brief titled "A Primer on State Rainy Day Funds," the Institute on Taxation and Economic Policy in Washington, D.C., listed four important features of rainy day funds: rules on how money is deposited, limits on how large it can grow, restrictions on how and when money can be withdrawn, and rules for replenishing those withdrawn funds.
Some advisers were also slammed for recommending arbitrary, and sometimes excessive, rainy day funds.
Design rainy day funds with clear, objective goals that policymakers can refer to regardless of changes in governors, legislatures, and business cycles.
Rainy day funds are one of the most common tools states have to soften the blow of economic downturns and budget shortfalls.