Weekly Opinion Editorial
GOVERNMENT
SHOULD REDUCE SIZE!
by Steve Fair
Oklahoma
state government has a Rainy Day Fund, aka the Constitutional Reserve
Fund. It works as a savings account for
government so in the case of an emergency, it can be tapped. Any revenue over 95% of revenue estimates
collected in a year is deposited into the Rainy Day Fund. The state constitution caps the amount to be
deposited to the fund at 15% of the General Revenue Fund estimate provided by
the State Board of Equalization for the prior fiscal year.
The legislature can tap the Rainy Day Fund
if the state’s official estimate shows that the following fiscal year will
bring in less than the current year. 3/8
of the Rainy Day Fund can be used for supplemental funding. Another ¼ of the fund can be tapped if the
governor and ¾ of the legislature declare a state of emergency.
Twice in the past eleven years, Oklahoma voters
have changed how the fund works. In
2004, the amount of money the legislature could use was reduced from 1/2 to
3/8. The change passed by a 2 to 1
margin. In 2010, Oklahoma voters
narrowly passed a proposal to increase the amount that was to be deposited to
the fund- from 10 to 15%. The measure
passed by a mere 20,000 votes statewide. Now it appears voters will be asked to
vote on changes to the Rainy Day Fund in November 2016.
State Representative Jon Echols, (R-OKC), says he intends to file legislation in the upcoming legislative
session allowing voters to amend the Constitution to both increase the cap –
but not lower it – and allow the Legislature to appropriate directly to the
fund.
“The
idea that we should cap how much money the state can save is, frankly,
ridiculous. Not only is there a cap on
how much we can save, there is also legitimate doubt among House staff as to
whether the Legislature has the authority to make direct appropriations into the
Rainy Day Fund. Neither of those restrictions make any sense. We had a $600
million budget gap last year, and we are now looking at up to $1 billion less
this year to appropriate. Our current approach is shortsighted and bizarre.
Taxpayers expect us to be prudent and develop a long-term approach to state
spending. This is not the way a citizen would run his or her family and it
certainly isn’t the way we should run our state,” Echols said.
Oklahoma Finance
Secretary Preston Doerflinger says he would like to create another fund,
similar to the Rainy Day Fund that would allow state government to sock away
some funds for down budget years. In an
editorial in The Oklahoman, Doerflinger said,
“I think there are tools we should put in place, maybe a separate fund that
would help equalize these types of downturns in the energy sector. It might cause some smoothing or leveling of
the pain that occurs if you were to see something this dramatic in the future.”
First, Echols has a point. Why restrict how much money the legislature
can put in savings? After all, saving
money is better than government spending it.
That sounds pretty good, but government is not a family or a business. When government socks away tax dollars into a
savings account that means they are overcharging taxpayers. If there is a surplus, give it back to the
people it belongs to- the taxpayers. Government, at all levels should operate
efficiently, but not be banking up a surplus- in good or bad times.
Second, the legislature taps the Rainy Day
Fund virtually every year. It doesn’t even
have to cloud up before they hit the savings account. That is why voters overwhelmingly voted to reduce
how much the lawmakers could tap. The
fund was set up for emergencies, but every year there is an emergency.
Third, the legislature should consider
fundamentally changing the budgeting process and force agencies to justify
every penny of tax dollar they are appropriated. They should also commit to identifying and eliminating
waste. They need to force government agencies
to consolidate. Stabilization should
never be the goal of government. It
should be to become more efficient and reduce in size and scope.
Currently the Rainy Day Fund has a balance of $382 million. With an expected budget shortfall of $1
billion or more, it’s a sure bet the legislature will be tapping the fund. Until Oklahoma government is truly
right-sized and streamlined, giving Oklahoma government more money- whether in
a savings account or not- is inconsistent with good government. Government
should be saving money by cutting operational costs, not by efficient management
of more money.
No comments:
Post a Comment