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rainy day fund

It’s always hard to save money. We know that’s true for many people, and it’s true for Lansing, as well.

And, politics makes it even harder.

A recent report by the nonpartisan Citizens Research Council says Michigan is not ready for another recession. The report says lawmakers are short-changing the state’s savings-account, officially known as the Budget Stabilization Fund, but commonly referred to as the “rainy day” fund.

injured piggy bank
Ken Teegardin / http://j.mp/1SPGCl0

The state's savings account wouldn't last long if there was another economic downturn. That's according to new analysis from the Citizens Research Council.

The independent government watchdog says Michigan's "rainy day" fund is slowly recovering after it was drained during the Great Recession, but the state is still unprepared for a new downturn.

This Week in Review, Weekend Edition host Rebecca Kruth and senior news analyst Jack Lessenberry discuss what needs to happen to get Michigan's piggy bank back in shape.

Ingham County

Michigan cities and towns are hurting for cash. Many have had to cut services like street and sidewalk repair. Some have had to reduce the size of their police and fire departments. 

The usual suspects of municipal finance woes—weak property tax revenues and rising employee retirement costs—share much of the blame.

But today there is another culprit: the state of Michigan itself.

steve carmody / Michigan Radio

A Michigan U.S. Senator says a federal aid package for Flint might move through Congress quicker if state officials tap the rainy day fund and budget surplus now. 

Sen. Debbie Stabenow and others have been pushing for hundreds of millions of federal dollars for Flint’s water crisis.

But action in Congress is stalled. Sen. Mike Lee, R-Utah, has put a hold on the legislation. He’s expressed concern that the state of Michigan hasn’t committed to spend more of its own money to address the crisis.  

What's the state of the rainy-day fund?

Oct 15, 2015
Money
Steve Carmody / Michigan Radio

The Michigan Legislature has approved $9 million to deal with the fallout from the Flint water crisis. That price tag has turned attention to how the state’s rainy-day fund is used.

Gov. Rick Snyder has made replenishing that fund a budget priority since he entered office.

Jennifer White spoke to Susan Demas, publisher of Inside Michigan Politics, and Ken Sikkema, former Senate Majority Leader and Senior Policy Fellow at Public Sector Consultants about the state of the rainy-day fund.

Demas says as of the last budget cycle there's about $386 million in the fund. 

Alan Cleaver / Flickr

LANSING, Mich. (AP) - Gov. Rick Snyder and lawmakers don't agree on how much money to set aside in Michigan's savings account.

The rainy day fund was nearly empty when the Republican governor took office after a decade of job losses and budget crises. He successfully built it back up to more than $500 million and is hoping to add another $75 million.

Snyder says a healthy cash reserve is good for the state's credit rating and prudent in case there are future economic downturns.

But the GOP-led Senate next week is expected to approve a budget without extra money in the account. Some legislators say savings are robust and the $75 million should go to other priorities instead.

The House is more in line with Snyder. Lawmakers will negotiate their differences next month.