(The Center Square) – Iowa could cover 10.3 percent of its annual general fund expenditures using only its rainy-day fund, the 17th highest rate among the 50 states, according to a new study from the Tax Foundation.
The states that rely most heavily on volatile revenue from oil, gas and other extracted natural resources – Wyoming, Alaska, North Dakota and New Mexico – had the most robust revenue stabilization funds, according to the analysis. Such states often need to sock away a larger amount of excess revenues during prosperous years to fund state operations when oil and gas prices drop, the study reported.
The rainy-day funds allow states to prepare for inevitable downturns in the economy, according to the Tax Foundation. The funds are now a standard component in states’ fiscal toolkits, the analysis said.
What’s the Status of Your State’s Rainy-Day Fund?
RankStateRainy-Day Balance as % of General Fund Spending1Wyoming109.0%2Alaska52.6%3North Dakota30.0%4New Mexico26.8%5West Virginia16.9%6Connecticut15.3%7Vermont13.7%8Oregon13.5%9California13.0%10Texas12.9%11Oklahoma11.5%12South Dakota11.1%13Michigan11.0%13Nebraska11.0%15Georgia10.6%16Minnesota10.4%17Iowa10.3%18Alabama10.1%19Utah9.9%20Idaho9.5%20Massachusetts9.5%22Nevada8.9%23Arizona8.8%24Indiana8.6%25Mississippi8.1%26Washington8.0%27Colorado7.9%28Maine7.8%29Ohio7.7%30New Hampshire7.4%31Tennessee7.0%32South Carolina6.6%33Missouri6.3%34Maryland6.2%35Virginia6.0%36Delaware5.4%37North Carolina5.3%38Rhode Island5.2%39Hawaii4.8%40Florida4.6%40Montana4.6%42Louisiana4.4%43Wisconsin3.6%44New York3.2%45Arkansas2.7%46Kentucky2.6%47New Jersey1.0%47Pennsylvania1.0%49Illinois0.0%49Kansas0.0%
Source: Tax Foundation
Note: The percentages for Michigan, North Carolina, Oklahoma and Wisconsin are from 2019, while the Georgia numbers come from 2018. The study’s calculations for the other states are based on 2020 data.