A new report published by Pew Charitable Trusts (Pew) found that Arizona’s Rainy Day Fund balance ranks in the bottom half of states nationally — and leaves Arizona at risk in the event of an economic downtown. In fact, the report found Arizona has less money today in its cash reserves than the state did prior to the Great Recession, which left Arizona with a budget shortfall of more than $2 billion.
According to the Pew study, Arizona’s current Rainy Day Fund balance could support state operations for only 17 days, compared to 24 days in fiscal year 2007. That figure also trails the national median of 23.2 days.
To secure Arizona’s fiscal future, Governor Ducey has made investing in Arizona’s Rainy Day Fund a top budget priority. During his state of the state address in January, he said:
“I’m proposing that we secure Arizona’s future and prepare responsibly for the unexpected and the inevitable — by bringing our Rainy Day Fund, to record-breaking balance of one billion dollars.”
At the end of FY 2018, the Rainy Day Fund balance was approximately $457.8 million, or 4.5 percent of General Fund revenues. At $1 billion, the Rainy Day Fund will reach its highest dollar amount and the highest percentage of General Fund revenue since its creation, helping better prepare the state for the next economic downturn.
Arizona’s fiscally conservative budget also invests in the things that matter, including fulfilling the second year of teacher pay raises and investing in law enforcement officers. Learn more about Arizona’s budget HERE.
Arizona’s Rainy Day Fund was created in 1990 as a reserve of funds the state can tap during economic downturns. By preparing for the unexpected now, Arizona can ensure its priorities remain funded while avoiding the dire fiscal choices experienced during the Great Recession.