This Budget Brief provides an overview of the recent reforms that make it easier to understand the state budget (or, that make it more transparent), highlights some new improvements in that regard this year, and offers an example of how the budget could present important information even more clearly.
Following two years in which the state budget was cut deeply and taxes were increased to address substantial budget deficits, the Governor’s FY 2011 budget recommends additional cuts, suggests modest revenue increases, and relies heavily on assistance from the federal government.
The balance in the state’s Stabilization Fund has varied over the past 10 years. The Stabilization Fund–often referred to as the “Rainy Day Fund”–is a cushion for when the economy turns down. It is like a savings account for the state to turn to when there is not enough money in the General Fund (the “checking account”) to fund the state’s operations.