Newspaper article THE JOURNAL RECORD

Commentary: Expanding State Savings Account Makes Good Sense

Newspaper article THE JOURNAL RECORD

Commentary: Expanding State Savings Account Makes Good Sense

Article excerpt

A sound fiscal policy is essential to proper funding of necessary state government functions without overburdening taxpayers. To have it, there must be some restraints on spending excess tax revenues.

Certainly the budgetary binge Gov. Brad Henry has charted for the 2006 legislative session does not reflect such a policy.

Also contributing to good financial planning is for the state to maintain an adequate amount of funds in reserve for emergencies and revenue shortfalls that occasionally occur.

Henry has proposed to do this by submitting an amendment to Article X section 23 of the Oklahoma Constitution to expand the Constitutional Reserve Fund, often called the rainy day fund, and apparently has bipartisan support of the idea from legislative leaders of both parties.

Created by a vote of the people in 1985, the fund served the state well until previous Legislatures and governors began to abuse it by taking money from it as part of the regular budgetary process.

Meant to cover actual emergencies, the Legislature and governor simply decided any time there was not as much money as they wanted to spend it was an emergency, and they took money out of the reserve fund.

In 2004, voters approved an amendment reducing the percentage of the fund that may be taken for specific reasons, but leaving unchanged how the Legislature and governor can declare an emergency. They still could revert to past practices and use money in the fund for normal budgetary expenditures. A constitutional definition of emergency that could be inserted in the legislation would forestall this practice.

Currently to meet revenue shortfalls up to three-eighths of the money in the fund can be used when the state Board of Equalization's certification of the forthcoming fiscal year is less than the current fiscal year.

Three-eighths of the fund can be appropriated if the board determines revenues are insufficient to meet current fiscal year appropriations. In both cases, the amount is limited to the actual differences.

If the governor declares emergency conditions exist and the Legislature concurs by a two-thirds majority of each the Senate and House, then 25 percent of the balance can be spent. …

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