What are state rainy day funds and how do they work? Q.What are state rainy day funds and how do they work? A.Rainy day funds, also known as budget stabilization funds, allow states to set aside surplus revenue for use during unexpected deficits. Every state has some type of rainy day fund, though deposit and withdrawal rules vary considerably. Read more about What are state rainy day funds and how do they work?
What are municipal bonds and how are they used? Q.What are municipal bonds and how are they used? A.Municipal bonds (a term that encompasses both state and local government debt) are obligations that entitle owners to periodic interest payments plus repayment of principal at a specified date. States and localities (cities, townships, counties, school districts, and special districts) issue bonds primarily to pay for large, expensive, and long-lived capital projects. Read more about What are municipal bonds and how are they used?
What are tax and expenditure limits? Q.What are tax and expenditure limits? A.Tax and expenditure limits (TELs) restrict the growth of government revenues or spending by either capping them at fixed-dollar amounts or limiting their growth rate to match increases in population, inflation, personal income, or some combination of those factors. As of 2020, 31 states had at least one kind of TEL, including those states requiring a supermajority vote of the legislature to raise new taxes or revenues. Read more about What are tax and expenditure limits?