5 Trends. Rainy Day Funds.

• Goldilocks Quagmire. Rainy Day Funds shouldn’t be too large or too small.
• Microeconomics. Each state has its “own optimal rainy day fund amount;” there is no national standard for Rainy Day Funds
• Platitudes Fail. “5 to 8 percent of annual spending” rule do not work
• Save,save,save. Most states do not save enough. Caps on Rainy Day Funds should cover  typical recession-led drops in revenues.
• Spending. Rainy Day Fund policies must also take into account  state spending policies.

Governing | The Great Recession’s Lessons on Rainy Day Funds