By Brent Addleman | The Center Square
A new study shows Vermont’s rainy day fund continues to grow.
Pew Charitable Trusts’ report said Vermont can operate for 53.6 days if the state had no other source of revenue, based on its estimated $244 million rainy day fund at the end of fiscal year 2021.
Rainy day funds are utilized by states to aid revenue forecasting errors, budget gaps during economic downtowns and other emergencies, according to the report.
Vermont’s rainy day fund has grown incrementally over the past seven years, according to Pew data. In 2016, the $78 million rainy day fund would have operated the state for 19.3 days, and that amount jumped to $107 million in 2017 for 25.3 days of operation.
Data showed the fund jumped substantially in balance and operating days to $133 million in 2018 for one month of operating capital before soaring to $224 million and 51.3 days in 2019. For 2020, the fund could have operated the state for 51.8 days on $228 million.
Data showed the fund had $57 million in 2010, and the state could have operated for 19.2 days.
Pew reported the national average for operating on rainy day funds was 29.4 days.
Pew cited “unprecedented federal aid and smaller-than-anticipated tax revenue shortfalls” that could push states to invest more in rainy day funds since reserves dipped during the pandemic as states addressed the ongoing public health crisis.