A Rainy Day Fund That Can’t Be Used Even When It’s Pouring
The Wisconsin Budget Project has released a new analysis of a proposed amendment to the state Constitution that would require the state to make specific contributions to a rainy day fund. Establishing a rainy day fund could help cushion against future economic downturns; however, this proposal would make the fund difficult to access in times of need and could have the side effect of driving up state-imposed fees. Worse, it would enshrine these changes in the state constitution, severely limiting the Legislature’s options for confronting a budget crisis.
The proposed constitutional amendment, Assembly Joint Resolution 21, would:
- require contributions to a state “fiscal responsibility fund” intended to be used in a recession;
- specify that if the fund level gets high enough, the excess must be returned to taxpayers; and
- have the effect of capping state taxes (but not property taxes).