Rainy Day Fund
Why it Matters:
Having a healthy balance of savings in the Rainy Day Fund is not only fiscally responsible, it provides citizens and businesses with confidence that the state has planned for unseen changes. The state's Rainy Day Fund (also known as the Budget Stabilization Fund) is designed to help the state weather challenging economic periods or unforeseen emergencies. The Rainy Day Fund peaked at $1.3 billion in fiscal year 2000, but was quickly depleted. Michigan began rebuilding the fund balance in fiscal year 2012 and projects that the balance will be almost $500 million at the end of fiscal year 2015. The upward progression of the fund balance was impacted in fiscal year 2014 by the withdrawal of $194.8 million to support the Detroit bankruptcy settlement, providing added resources for the recovery of Michigan's largest city. That withdrawal will be repaid to the state's Rainy Day Fund in the amount of $17.5 million annually from tobacco settlement funds.