LANSING, Mich. – The Michigan Senate on Wednesday passed Senate Bill 569, a bill that would allow local governments to maintain a larger budget stabilization fund, commonly referred to as the “rainy day” fund.
“The economic struggle of the last decade is a perfect reminder of why the rainy day fund exists. It just makes sense to allow local governments that have been good stewards of their resources to save a little more and insulate their residents from future challenges,” said Sen. Mike Nofs, R-Battle Creek, who is the sponsor of the legislation. “This is simply about empowering our communities to deal with unforeseen situations proactively and responsibly.”
The legislation would not change any current restrictions that exist on the use of budget stabilization funds. Local governments may not raise taxes or transfer funding away from other legal responsibilities to fill the fund. Acceptable uses for the fund include covering a general fund deficit, preventing a reduction in public services or handling the expenses that arise from a natural disaster.
The bill now heads to the House for consideration.