Treasurer Stacy Garrity Commends General Assembly for Rainy Day Fund Increase
Addition of $900 million will lift Pennsylvania’s reserve fund above the national median
Harrisburg, PA - Pennsylvania Treasurer Stacy Garrity today commended the General Assembly for taking action to add nearly $900 million to the state’s Rainy Day Fund. House Bill 735, approved unanimously by the Senate last week and approved by the House this week, authorizes the deposit by clarifying the definition of “surplus” in the law governing the Rainy Day Fund.
“Continuing to build our state’s Rainy Day Fund is a smart, prudent way to plan for the future. I applaud the General Assembly and the Governor for this substantial deposit, which will strengthen Pennsylvania’s fiscal outlook. With this additional $900 million, our Rainy Day Fund will surpass $6 billion – putting our state above the national median.”
Pennsylvania State Treasurer, Stacy Garrity
Treasurer Garrity said the $898.3 million deposit will be made within one business day after Treasury receives a requisition from the Governor’s Office of the Budget. The balance of the state’s reserves will jump to more than $6.1 billion from the current $5.218 billion. That’s enough money for the Commonwealth to run for more than 48 days, above the national median of 44.5 days.
Building and maintaining the Rainy Day Fund are integral to responsible state budgeting. Moody’s emphasized the need for a strong Rainy Day Fund in its recent Rating Action which upgraded Pennsylvania’s outlook from stable to positive and affirmed our state’s Aa3 rating: “Maintenance of adequate reserves is particularly important in Pennsylvania given a history of protracted budget negotiations, as well as demographic weaknesses that could have negative implications for long-term job growth, overall economic performance and state revenue.”
“Defining ‘surplus’ more clearly benefits Pennsylvania taxpayers by eliminating any questions about the intent of the Rainy Day Fund law. It also conforms to historic practice in the Commonwealth.”
Pennsylvania State Treasurer, Stacy Garrity
An amendment to HB 735, sponsored by Majority Leader Joe Pittman (R-Indiana), defines “surplus” as, “A fiscal operating result which occurs in a fund at the end of a fiscal year, whereby expenditures, including tax refunds, are less than the fund’s beginning balance, revenues and receipts and lapses during the same period.”
The Rainy Day Fund, formally known as the Budget Stabilization Reserve Fund, provides a fiscal safety net for possible economic downturns to help prevent tax hikes and cuts to discretionary programs.
