Wyoming lawmakers should consider almost doubling the state’s rainy day reserve fund if they want to be assured that the fund would be enough to weather an economic downturn.
That’s one of the main takeaways a presentation from theresearch arm of the Pew Charitable Trusts to Wyoming’s Joint Revenue Interim Committee Friday in Buffalo.
Pew brought up three main points for Wyoming legislators to consider. First, they suggested the state should decide how much protection the rainy day fund should offer in the case of an economic downturn. Similar to the range of protection offered by car insurance, this could range from a smaller fund that can only be sufficient to weather a downturn 50% of the time, to a larger one that is sufficient 90% of the time. Second, they should consider attaching a written out, statutory purpose to that fund. And third, they should explicitly decide on what circumstances are ok to withdraw money from it.
Currently the state’s main rainy day fund has about 1.8 billion dollars banked. But Joint Revenue Committee Co-Chair Michael Madden says if they want full coverage they have a ways to go.
“A 90 percent level of protection over up to a ten year slump would require about 3.5 billion dollars [in the rainy day fund].”
Madden says legislators were shocked by Pew data showing that Wyoming’s revenue intake was the second most volatile of any state, behind only Alaska. He says lawmakers will use the presentation when they meet again in the budget session.
