In recent years, most state governments have experienced painful budget deficits. Many states have reacted to these shortfalls by cutting spending or increasing taxes. Almost all states now have a third option that can help postpone these painful decisions: using a rainy day fund (RDF). Like a savings account, an RDF sets aside surplus revenue during periods of economic growth for use in times of budget shortfalls. This policy brief takes a closer look at how rainy day funds can help states through difficult fiscal times, and assesses options for improving the adequacy of these funds.
Tax Basics
These ITEP publications provide a broad overview of state tax systems as well as narrower information about specific state tax policies.
-
brief July 1, 2004 A Primer on State Rainy Day Funds
-
report January 15, 2003 Who Pays? A Distributional Analysis of the Tax Systems of All 50 States [2003 Edition]
State governments are facing a profound fiscal crisis. In the past year, states have grappled with mounting budgetary shortfalls, as tax revenues have slumped while spending pressures have continued to… -
report June 15, 1996 Who Pays? A Distributional Analysis of the Tax Systems of All 50 States [1996 Edition]
This study looks at taxes paid by income group, as shares of income, for every state and the District of Columbia. Our primary finding is that by an overwhelming margin,…