A downturn in the economy would quickly drain the state’s “rainy day” savings.
Michigan’s “rainy day” fund can help the state weather a recession without deep cuts or tax hikes. But that requires lawmakers to deposit generously when times are good.
Craig Theil is with the non-partisan Citizens Research Council. He says lawmakers tend to focus on boosting funding for services or cutting taxes when there’s a revenue windfall.
“During an improving economy, there’s this third option, which is putting money away for the rainy day.”
There is currently about 700 (m) million dollars in the fund, which zeroed out during the last recession.