Ballot Proposal 5

Set Contribution Targets for Rainy Day Fund to Promote Sufficient Budgetary Reserves

What you will see on the ballot

Set target amount of money to hold in reserve funds, including rainy day fund, to address unexpected financial hardships in future years, and require development of methodology to calculate contributions.  

• A “yes” vote requires the Mayor to develop methodology for calculating deposits to rainy day fund, with deposits subject to approval in the City budget.  
• A “no” vote leaves laws unchanged, with no reserves target.  

What this proposal says 

This proposal would set savings targets for the City’s Rainy Day Fund and require the City to publish a plan for how it adds money to the fund.   

What this proposal means

• In 2019, voters approved the creation of a Rainy Day Fund, which allows the City to set aside money for use during economic downturns, emergencies, or unexpected revenue shortfalls. However, there is currently no requirement to save any particular amount each year.   
• This proposal would set a goal of maintaining a minimum balance equal to at least 12% of the City’s previous year’s tax revenue in the Rainy Day Fund or other fund reserves. By May 2027, the Office of Management and Budget, in consultation with the Comptroller, would publish a plan outlining how deposits should be made when the fund is below target. The methodology would be updated by May 2030 and every four years after that. Deposits could take place over several years or be skipped during financial hardship and would still require approval by the Mayor and City Council through the normal annual budget process.   
• The proposal would also make permanent in City law a State requirement that limits withdrawals to 50% of the fund unless the Mayor certifies a compelling fiscal reason. 
• These changes would go into effect immediately upon voter approval certification.