Moody's Report Highlights Importance Of 'Rainy Day' Funds, Like Wyoming's
Forty-two states are not prepared for a pandemic-induced recession. That’s the finding of a recent analysis from Moody’s Analytics. In the Mountain West, the prognosis isn’t as bad as it might seem at first.
“The Mountain West has, for several years now, been the leading region in terms of economic growth, population growth, so they do have a fairly strong foundation,” said Sarah Crane, an economist with Moody’s Analytics.
Crane said no state could have fully prepared for the shock and severity that COVID-19 wreaked on budgets. Many local economies in the Mountain West rely on tourism and energy, industries devastated by the pandemic.
“There are other states that are highly dependent on energy, such as Wyoming," Crane said. "Colorado is even still highly dependent on energy, so they will suffer on multiple fronts."
When economies are growing, Crane said it’s important for states to set aside revenue so they can better weather downturns.
Wyoming did just that, saving up the largest rainy day fund in the nation, which will help soften the blow as oil and gas revenue dries up. Colorado, on the other hand, is the only state in the nation without a rainy day fund, although it does set aside a percentage of discretionary spending.
Unemployment in Nevada is above 28%, the highest rate for any state since the Bureau of Labor Statistics began tracking unemployment data. The state has already emptied its $401 million rainy day fund to fight the impacts of the virus.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
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