State rainy day fund back to 85% of pre-COVID balance

CARSON CITY — Nevada’s $401 million rainy day fund, drained to zero two years ago as the COVID pandemic gouged state finances, has been restored to 85 percent of its pre-pandemic level as economic conditions have rebounded, state officials said Tuesday.

Statutory transfers to the fund, which is drawn on as needed during economic downturns to stabilize government operations, boosted its value to $340 million, state Treasurer Zach Conine announced.

The fund reached its $401 million record level just before all of it was transferred in May 2020 in answer to revenue shortfalls roughly twice the size, helping to forestall deeper budget cuts.

Conine said last week’s sizable transfers, which are calculated based on percentages of anticipated revenue and excess general fund collections, were “just one key economic indicator” of the state’s improving financial outlook, with revenue collections trending higher than projected.

A solid fund balance, as a measure of solvency and fiscal responsibility, also helps the state maintain good credit and reduce its borrowing costs, he noted.

“Nevadans can rest assured that the state’s financial situation is strong as we recover from the impacts of the pandemic,” Conine said.

In a statement, Gov. Steve Sisolak cited “difficult choices” the state made at the outset of the pandemic “to protect lives and livelihoods” as well as the “balanced, thoughtful budget” his administration presented to lawmakers in 2021.

Replenishing the state’s reserve account “will help set Nevada up for further success in the long-term while we continue to focus on creating good-paying jobs for Nevadans,” Sisolak said.

Contact Capital Bureau reporter Bill Dentzer at bdentzer@reviewjournal.com. Follow @DentzerNews on Twitter.