‘Rainy Day’ Funds Sit Unused In Some States

BATON ROUGE, La. (AP) — A handful of states with billions of dollars socked away in "rainy day" funds for troubled financial times are discovering they can't use that money to offset program cuts.

State officials and budget experts say stringent fund rules have tied the hands of lawmakers in nearly a dozen states even as they consider raising taxes, slashing health and social services and shuttering education programs. Some states worry using the money would hurt their bond rating.

The rules are so strict in some states that the savings accounts are off the table for crafting next year's budgets.

While some experts say it makes sense to use rainy day funds in a severe recession, others contend that states shouldn't use the money to constantly plug budget gaps and avoid necessary cuts.