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 ?
The foundation's research has found that even in states with the agencies' highest rating (triple-A), policymakers often are unsure about how best to manage their rainy day funds to earn or keep high credit ratings.
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.
Rainy day funds are one of the most common tools states have to soften the blow of economic downturns and budget shortfalls.
2012 rainy day funds Arkansas United States Have funds 37% 40% No funds 58% 56% Arkansas vs.
When rainy day funds work, it is the strength of their withdrawal rules that matter.
In a 2005 policy brief titled "A Primer on State Rainy Day Funds," the Institute on Taxation and Economic Policy in Washington, D.
The rainy day funds cannot be spent without legislative appropriation.
Still, only 18 states in fiscal 2015 were able to cover more days' worth of operating costs with their reserves--counting both rainy day funds and general fund end-of-year balances--than before the recession, according to data collected by the National Association of State Budget Officers (NASBO).
Many states used the unexpected excess to supplement appropriations or fortify their rainy day funds.
Rainy day funds are meant to be used in times such as these.
In FY 2004 and 2005, market recovery will begin modestly, in-line with economic expansion, and will accelerate as governments replenish rainy day funds and expand the utilization of alternate funding methodologies for technology initiatives," says Krouse.