Brief Budget Stabilization Funds
How States Save for a Rainy Day
Kim S. Rueben, Megan Randall
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Budget stabilization funds (BSFs), also known as rainy day funds, allow states to set aside surplus revenue for times of unexpected revenue shortfall or budget deficit. This fact sheet describes how BSF rules vary across states and reviews evidence on how they affect savings and volatility.

Research Areas Economic mobility and inequality Taxes and budgets State and local finance
Tags Fiscal policy State and local tax issues
Policy Centers Urban-Brookings Tax Policy Center