Rainy day fund
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A rainy day fund, also known as a budget stabilization fund, is a government fund set aside during years of budget surplus for lean years in which tax revenues fall, creating a deficit.[1]
States fund their rainy day funds in a variety of ways. They either transfer money to the fund through line-item budget appropriations or by designating portions of budget surpluses. Some states even make deposits from specific revenue sources, such as mineral revenues or natural gas revenues.[1]
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