08 June 2009

Keeping Money for a Rainy Day in W.Va.

West Virginia is among a dozen states that seeks to maintain a "rainy day"fund that equals 10 percent of its general revenues. But as The Associated Press reports, some Republican lawmakers have been questioning both the size of the Mountain State's emergency reserves and its potential uses.

Gov. Joe Manchin and fellow Democrats who control the Legislature have been faulted for failing to tap the fund for the recently passed state budget, or to shore up the unemployment compensation program.

The article cites the National Conference of State Legislatures, which opines that "budget experts and observers debate the amount states should accumulate in their budget stabilization funds... Suggested levels can vary according to individual state circumstances, specific economic conditions or access to atypical revenue sources, such as vast mineral resources."

AP also reports that "the recession is sorely testing the states' target reserve levels, according to this month's Fiscal Survey of the States from the National Governors Association and the National Association of State Budget Officers."

"All five of West Virginia's neighbors were among the 23 states that relied on rainy day funds to ensure their current budgets balanced, the survey shows," the article said. "Fifteen states will tap those reserves for their upcoming budgets. But just four surrounding states can take that step: Kentucky all but exhausted its fund to aid this year's spending."

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