Pew analysis: Nevada can operate for less than 4 days on its rainy day fund
By Bethany Blankley
May 17th, 2018
If Nevada was forced to rely solely on its rainy day fund, its state government could operate for fewer than four days, according to a new study from Pew Charitable Trusts.
"Nevada closed fiscal 2017 with $326 million in their total balances – enough to operate the state for 29.8 days," Jonathan Moody, a researcher at The Pew Charitable Trusts, told Watchdog.org. "This places the state slightly above the 50-state median of 29.3 days. However, the state’s rainy day fund held $38.9 million, or 3.6 days’ worth of operations. This total is below the 50-state median of 19.8 days for rainy day funds. Looking at just the rainy day fund, Nevada had the sixth fewest days’ worth of savings in their rainy day fund.”
Pew's report, "Fiscal 50: State Trends and Analysis", concludes that seven U.S. states have less than one week’s worth of operating funds, including Nevada.
“Nevada’s rainy day funds base deposits on when the state ends the year with a surplus," Moody said. "Of note, Nevada experiences considerably more revenue volatility – the state has the 22nd highest volatility score, meaning that there is more unpredictability in the state’s revenue from year-to-year.”
The Pew report provides a comprehensive analysis of a range of financial data for all 50 states. One aspect tracks both the “rainy day funds” and “total balances,” defining rainy day funds as the amount of money that policymakers set aside and total balances as the sum of rainy day funds and ending balances in a state’s general fund at the end of each fiscal year. Expected reserve balances are based on budget projections, which can differ by the end of the fiscal year.
“Reserves in rainy day funds – also called budget stabilization funds – were the largest component of states’ financial cushions in fiscal 2017,” the Pew report states. They accounted for more than $2 of every $3 of total balances, more than what states held before the Great Recession.
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