Slide 44 of 84
The "Rainy Day Fund" is a simple concept. Money goes into the fund in good times so money may come out during hard times. Formulas are based on performance of the economy are used to determine how much should go in and how much may come out. Other states have emulated Michigan's path breaking efforts in this area. Some states use different formulas; some put in a percentage of surplus into their fund, some states make a direct appropriation into their fund. In Michigan direct appropriations may be made and sometimes the surplus from the prior year is earmarked for the BSF by the Legislature.