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Ohio's rainy day fund, which serves as a reserve for hard times, grew by nearly $30 million Wednesday to a record $2.034 billion. At the same time, though, the state lowered its expected tax collections for 2017 by $282 million.

(Robert Higgs, cleveland.com)

COLUMBUS, Ohio - Ohio's rainy day fund, which serves as a reserve for hard times, grew by nearly $30 million Wednesday to a record $2.034 billion.

State budget Director Timothy Keen announced the $29.5 million deposit into the account -- formally known as the Budget Stability Fund -- was possible because of a stronger-than-expected balance from the 2016 budget year, which ended June 30.

"The fiscal condition of the state is strong," Keen said in a statement. "We finished the year with a larger ending balance than planned due to state spending that came in below projections, making possible the fifth deposit to our rainy day account in six years."

The rainy day fund is a reserve that the state can tap in the event of a budget crisis. It became a symbol of Ohio's budget woes as the great recession whacked the state's economy and hit tax revenues.

Gov. Ted Strickland tapped the fund for about $1 billion to balance the books for the 2010-2011 budget, which the state enacted in mid 2009. Kasich, when talking about Ohio and economic recovery, has often cited the rebuilding of the fund as evidence of how far the state has come.

The state dropped $200 million plus into the fund in each of Kasich's first two years in office. In 2013 it deposited nearly $1 billion. Another $500 million went into the fund in 2015, lifting the total above $2 billion.

Those deposits come in part because of cuts in state aid to local governments - counties, cities, villages, and townships. Some local governments are raising taxes to make up for state aid Kasich's budgets have cut.

By state law, the rainy day fund is limited to an amount equal to 8.5 percent of the previous year's general fund revenue. With Wednesday's deposit, the total is up to about 6 percent of last year's revenue.

While the state was able to boost the rainy day fund Wednesday, Keen also downgraded the amount of revenue the state expects to take in for the next year by nearly $270 million. Most of that is due to lower projections for income tax collections.

In the grand scheme of things, the amount is just a small piece of the total revenue projected from taxes - which tops $22.7 billion for 2017. Proportionally the reduction is about 1.2 cents on the dollar.

"This revision is consistent with the Kasich administration practice of being conservative in both our forecasting and our budgeting practices," Keen said. "Notwithstanding the downward revision of tax revenues, the ... budget remains balanced with sufficient ongoing revenues to cover expected ongoing expenditures."