BOSTON (WWLP) – Despite the pandemic, the state saw an increase in revenue, with April alone bringing in nearly 80-percent more than what was collected in the previous year.
Massachusetts is on good economic footing, and instead of putting that money to work, the Senate and House plans to boost the state’s rainy day fund. Rainy day funds serve as a state’s savings account should there be an economic downturn or shortfall.
Increasing the rainy day fund has become a nation wide trend, states collectively grew their rainy day funds by $37.7 billion, an almost 50% increase from the year prior. Republican lawmakers believe that money could be put to use instead of socked away:
“There is money that is being earned by people, that we are experiencing as a surplus that’s being taxed and that should be delivered back to families, motorists and families with children that are working really hard to try to survive the high costs of living in Massachusetts,” said Republican State Senator Ryan Fattman.
Although states across the country have different needs, 10 percent of budgeted spending is considered the ideal target to have saved away. In Massachusetts, both the House and Senate budget would call for more than 13 percent of annual budget spending stashed away in case of emergency. That’s enough to have the state run for 45.6 days. The nationwide median is 34.4 days.
Democrats are planning to increase the fund to plan ahead for an uncertain future.