A new national review of how each state treats their rainy day funds, conducted by Governing magazine using data from the National Association of State Budget Officers, appears to highlight some of those mounting concerns.
For example, Louisiana is one of 17 states that has not yet replenished its savings account since the 2009 recession, which was preceded by years of record deposits.
The balance in Louisiana’s Rainy Day Fund in fiscal year 2009 was $854 million.
Since then the balance has dropped steadily, along with deposits being made into the account.
As it stands now, the state’s Rainy Day Fund holds $359 million.
The Governing report offers this summary: “States now have a median 4.9 percent of annual expenditures saved for the fiscal year, down from 5.1 percent the previous year. What’s more, four states —Illinois, Nevada, New Jersey and North Dakota — now show no budget reserve funds, up from two states last year. The overall shift is a signal that tighter financial times could be ahead for states as a whole.”
In Louisiana, the Rainy Day Fund’s balance represents 3.7 percent of annual expenditures.
That percentage would of course decrease if lawmakers vote to use the Rainy Day Fund to help address a $304 million budget deficit for the current fiscal year that ends on June 30.
The issue will likely be hashed out beginning Feb. 13, the date Edwards announced will commence a special session.