CBC’s new report, Making Hay While the Sun Shines, highlights New York State’s significant progress improving its rainy day fund, but strongly recommends five additional reforms needed to ensure the State builds sufficient savings and does not squander them when there is not a recession or emergency. 

While the State vastly increased its rainy day savings from $2 billion to nearly $20 billion, it still should have $8 billion more to mitigate the shortfall caused by the first two years of an average recession.  

Furthermore, the State made statutory changes to increase the Rainy Day Reserve’s (RDR) maximum size and annual deposit cap, but additional steps are needed to ensure the State’s reserves are sufficient and appropriately protected. CBC recommends the State: 

• Combine all principal reserves into the RDR lockbox immediately; 
• Deposit up to an additional $2.4 billion to the RDR this year; 
• Set a target for the RDR of 22 percent of State Operating Funds (SOF) spending;  
• Increase the maximum allowed RDR balance to 30 percent of SOF spending; and 
• Mandate automatic RDR deposits when the economy is growing.  

Why the 22 percent target? Why have a 30 percent maximum? How much should the State be required to deposit annually? Delve into the report and recommendations.