Connecticut was the 7th lowest-ranked state in the country for state budget reserves even before it drained another $170.4 million out of its rainy day fund last week to close a deficit at the end of the 2015-16 fiscal year, according to a recent report from Pew Research.
Pew’s estimate are based on biannual surveys of state budget officers conducted by the National Association of State Budget Officers. Reserves in the study are considered to be the sum of general fund ending balances and rainy day fund balances.
Pew estimated Connecticut’s reserves at $406 million, the amount it had in the rainy day fund at the end of the 2014-15 fiscal year. That was just 2.2 percent of the overall budget, enough to run state government for about wight days. The 50-state median for reserves is about 8 percent of budget. Connecticut State Comptroller Kevin Lembo recommends a 15 percent reserve.
Lembo closed the books on the 2015-16 fiscal year last week, leaving just $235.6 million, or about 1.3 percent of annual operating costs in the rainy day fund.
Prior to the recession, Connecticut’s reserves were about 10 percent— which the state could run on for more than 39 days.