Rainy day funds

The shortfall of budget has a greater risk of making government services crippled through out the country. Numerous states are holding billion of dollars but they smacked away in rainy day fund. General funds are not enough to stabilize the situation. Make use of the reserve fund are not being allowed by the inflexible rules of the law makers. According to them if they raise tax it would result in cutting health and social services and the education programs will also be affected or stopped. The rainy day funds have been used by most of the states during the past three years. The reason behind was to improve the budget cuts.

Rainy funds refer to the budget stabilization. These funds makes possible for the states to reserve excess income, so they can use them in the time of emergency or sudden income loss or budget shortfall. There is a little number of states who don’t have such funds. These states are Arkansas, Kansas and Montana. These reserve funds balances the general fund during the time of economic development.