Tennessee could run the entirety of its government operations for more than a month relying on its rainy day balance alone, a reflection of a record $1.45 billion in savings as of the 2021 fiscal year, according to an analysis of state budgets released this week by the Pew Charitable Trusts.
The report noted that Tennessee was among 35 states to grow their rainy day balances in the past fiscal year, after an initial dip in financial stability at the start of the pandemic in 2020. Collectively states across the country increased their rainy day balances by $37.7 billion — a roughly 50% increase over the prior year.
The increases were attributed to higher-than-anticipated tax revenues and other temporary factors, which included an influx of pandemic-era federal funding.
"As states approach the close of fiscal year 2022, most expect to spend down at least a portion of their surplus funds," the report said.
Tennessee has long maintained a higher-than-average rainy day cushion, a result of fiscally conservative spending. Last month, state lawmakers passed a budget that included an additional $200 million in funds diverted to the rainy day reserves, which now stand at about $1.8 billion.
The decision to add to the state's rainy day funds was not without criticism. Some Democratic lawmakers cited urgent policy priorities, such as Tennessee's struggling public schools, as deserving of greater state funding.
Read more at TennesseeLookout.com.