What Matters Podcast: Rainy Day Funds

Federal Reserve Bank of Atlanta

What are rainy day funds and why are they important? States now have a total of about $62 billion in their rainy day funds—triple what they had during the Great Recession—but is it enough? What is the "magic number" for the percent of the General Fund Revenue that should be deposited into the rainy day fund? How can legislators ensure that states have enough money stored away to fix potholes, or larger, more problematic fiscal holes?

William Glasgall, Volcker Alliance senior vice president and director of state and local initiatives, discusses these questions and more with Richard Greene, special projects consultant for the Volcker Alliance, and Thad Calabrese, associate professor of public and nonprofit financial management and director of finance specialization, Robert F. Wagner Graduate School of Public Service, New York University. The three gathered at the Federal Reserve Bank of Atlanta for the FY2020 State Fiscal Conference on July 10 and 11.