Did Maine’s rainy day fund reach its legal maximum in fiscal 2025? | Fact brief

Maine’s Budget Stabilization Fund, commonly known as the rainy day fund, reached its legal maximum in fiscal year 2025.

In August, Gov. Janet Mills’ office announced that the fund had grown to a record $1.03 billion, the maximum allowed by law. State statute caps the fund at 18% of the previous year’s General Fund revenues.

Once the fund hits the cap, any excess year-end surplus is redirected to other accounts, including the Highway and Bridge Capital program, while investment earnings are diverted to the state’s retiree benefits trust. The state ended fiscal 2025 with a $152.2 million General Fund surplus.

Created in 2003, the rainy day fund is primarily used to cover General Fund revenue shortfalls during economic downturns. It can also be tapped for line-of-duty death benefits and, under limited conditions, to support nonprofit food programs during emergencies. The fund’s overall purpose is to provide financial stability, not to fund new programs.