Creating a national state rainy day fund
Subtitle: a modest proposal to improve future state fiscal performance
By: Rick Mattoon.
Series: Working paper series ;; WP-2003-20; Working paper series (Federal Reserve Bank of Chicago. Research Dept. : Online) ;; WP-2003-20.
Publisher: Federal Reserve Bank of Chicago
Published: 2003
Place of publication: [Chicago, Ill.]
Language: eng
Format: Electronic resource
Description: "Throughout the 1990s states created budget stabilization (rainy day) funds to help provide counter-cyclical support in their budgeting process.  Despite the sweeping popularity of such funds, many states have failed to adopt either contribution or expenditure rules that would create significant balances in their rainy day accounts.  This paper ask the question; what would happen if a national rainy day fund were established for the states with specific contribution and expenditure rules? The proposed fund would borrow from the unemployment compensation trust fund model by creating experience ratings for each state that would trigger differential fund contributions.  Simulations on fund performance under differing rules are provided.  <P> By constructing a national fund, local state pressure to spend reserve balances whenever they reach significant levels, could be avoided.  In addition, a more tightly constructed fund might improve state credit ratings and reduce capital financing costs for states"--Federal Reserve Bank of Chicago web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 10/1/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.