Caps on State Budget Reserve Funds

Every state maintains at least one budget reserve or “rainy day” fund designed to soften the impact of fiscal downturns and unexpected shortfalls. These funds vary widely, with some states placing clear percentage caps on reserves while others allow balances to grow without limit. The report provides a comprehensive, state-by-state look at how these caps are structured and the legal provisions that govern them. By comparing these frameworks, readers gain insight into how states prepare for financial uncertainty and manage long-term budget stability.