Adopted budgets should not show deficits or surpluses, since adopted budgets must be balanced. Sometimes an operating deficit is planned when an existing fund balance is used as a one-time funding source for the budget.
Most local governments maintain fund balances, money that is unused by the government from year to year. Some of these fund balances are kept in reserves for specified purposes, and may only be legally used for such purposes.
These reserves may be used to pay for items that need to be purchased
for long-term use or are one time in nature (for example, the purchase of land for a new county jail or the acquisition of a snow
plow). Reserves may also be set aside for the repair of equipment
or facilities, or for other purposes allowed by law.
Local governments usually also have unreserved fund balances. These balances are used to smooth out short-term variations in actual revenues and expenditures, protect against risks and other potential
budget shortfalls, and assure a consistent cash flow for the local government so it can pay its bills.
These fund balances may not always be shown in the budget document, but it is important to find out about them and their size relative to the budget as a whole.
OSC encourages and State law allows local governments to keep a reasonable fund balance. The Government Finance Officers Association recommends that municipalities maintain an unreserved fund balance equal to at least two months of annual total expenditures as insurance against unanticipated expenditures or revenue shortfalls. Citizen's Guide to Local Budgets
Can you explain the "rainy day" line item you expect to have and how big you want that to be? Of course, you understand municipalities can't set money aside for no apparent reason then charge the taxpayers new taxes the following year without using the surplus first. Of course, you know that. Right?
Maybe we should set aside a rainy day fund from the taxes paid by the winery owners in Seneca County. It could be a big help for any budget problems Junius could be facing. This is sarcasm....