Pew Trusts has updated a study of 50 state rainy-day funds; the results show New Jersey is all wet.
If the state were forced to run only on its rainy-day funds, the cupboard would be bare in two days, according to the Pew study.
Rainy-day funds are a useful fiscal tool that allow states to respond to economic adversity or unforeseen emergencies without negatively impacting the public through spending cuts or higher taxes. The idea of looking at how long a state could fund its operations only from its rainy-day reserves is a measure of the health of those balances compared across states with varying budget sizes.
The results, issued in September, showed enormous variability in the strength of states’ rainy-day funds. At the top was Wyoming, which could manage 255 days’ worth of spending from its fund. At the bottom was New Jersey, which in an emergency could depend on its rainy-day fund for only two days. The 50-state median was 48 days.
As to some of the states New Jersey might compare itself with? Massachusetts, 68 days; California, 43 days; Pennsylvania, 52 days; New York, 23 days, and Florida, 25 days.
Contact the reporter, Vince Conti, at vconti@cmcherald.com.
