The Pennsylvania Treasury Department
10/07/2024 | Press release | Distributed by Public on 10/07/2024 09:14
Treasurer Stacy Garrity: New Rainy Day Fund Investment Strategy Increases Earnings by $50 Million
Harrisburg, PA - Treasurer Stacy Garrity today announced that the Rainy Day Fund has generated $400 million in earnings since she implemented a new investment strategy in October 2023. That's $50 million more than would have been generated without the improvement.
"Our new investment strategy is paying off for Pennsylvania taxpayers. I'm proud that we've added an extra $50 million to the Rainy Day Fund, and I will continue to fight for fiscal responsibility. When I took office, the Rainy Day Fund was essentially dry - there was only enough money to run the state for about 48 hours. I've been a strong advocate for building our reserves, and thanks to a number of wise decisions by the General Assembly and the Governor, we now have enough set aside to run the state for more than 53 days, which is above the national median."
Pennsylvania State Treasurer Stacy Garrity
The goal of the new dedicated pool is to use more targeted investments to provide greater returns while still investing in high-quality, short-term, fixed-income assets. The new strategy invests 20 percent of Rainy Day Fund assets in the state's Consolidated Cash Pool, with the remaining balance shared across U.S. Treasury and federal agency securities, investment-grade corporate bonds and other fixed-income securities, all with maturities averaging less than three years.
The Rainy Day Fund currently has a balance of $7.04 billion, including a $737 million deposit made last month, and the $400 million of earnings generated over the past year.
The Rainy Day Fund has been bolstered by large deposits over the past four state budgets: $2.6 billion in September 2021, $2.1 billion in September 2022, $900 million in November 2023, and $737 million last month.
Building and maintaining the Rainy Day Fund are integral to responsible state budgeting, and Pennsylvania's strong reserves have been noted in positive ratings actions by Moody's, S&P, and Fitch.