Maine could run its government for just over nine days — 9.2, to be exact — on what it has in its reserve funds, according to a new study.
With $80.1 million in rainy day cash, Maine falls well below the national median, according to a Pew Charitable Trusts analysis released last week. Alaska has the most in reserves, with $13.3 billion — which could fund the state for almost 664 days — while Arkansas comes in last, with a cool $0.
The good news is that Maine’s reserves — typically held in what’s known as the Budget Stabilization Fund — actually appear to be growing (though it’s nowhere close to the 70-day cushion it had in 2000). A similar study based on 2013 data showed that the state had only $60 million in that fund that year.
The head of finance for the state clarified that Maine has about $60-$65 million in the stabilization fund, while the legislature is holding onto about $18 million left over from last year’s surplus that, if not needed to fill any shortfalls in 2015, will end up back in reserves. He agreed that the state has far too little in savings.
“You need a considerably larger balance than what we have in there now,” said Richard Rosen, commissioner of the Department of Administrative & Financial Services, who said the state ideally would have at least $300 million on hand to balance the budget if another recession hit.
The study found that states are generally getting more financially healthy following the 2008 financial crash.
Check out the interactive graphic. But bear in mind that Pew cautions some of these states may have other funds outside of their standard reserves that could make it difficult to compare with each other.
