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To prepare for a possible recession, state lawmakers have been building up their budget stabilization—or rainy day—funds for nine years straight, reaching a record combined total of $74.9 billion in fiscal year 2019, according to The
Pew Charitable Trusts.
Rainy day funds can lessen the pressure fixed costs—like debt service, retirement system contributions, Medicaid and the Children’s Health Insurance Program—can have on a budget during economic downturns.
Funds were at an all-time high in early March and, on average, could be used to run government for almost 30 days, compared with just 17 days in 2007.
States were prepared for a rainstorm. But they got a tsunami instead.