Jun
3
The Oklahoma Policy Institute is again calling for changes to the state’s Rainy Day Fund which would allow lawmakers easier access to the $600-million it contains (recommendations start on page 8 of the linked .pdf file). They believe that since revenues could increase a bit this year, it would preclude using more than a quarter of the Rainy Day Fund for the budget next year. You see, if revenues decline, more than half of the $600-million could be used, but if they increase, only a quarter can be taken out and then only if the Governor declares an emergency.
Apparently the thought of having a savings account and not using it just drives the Oklahoma Policy Institute crazy, so the recommendation is for lawmakers to put the issue to voters to change the Rainy Day Fund rules to make it easier to raid. Here’s my question: If it’s such a good idea, what’s stopping you from starting an initiative petition?
Here at Oklahomans for Responsible Government, we’ve been working hard this past session to make it easier for citizens to get issues on the ballot. And we have succeeded. If the Oklahoma Policy Institute actually thinks a majority of Oklahomans would vote to make it easier to raid the Rainy Day Fund, it should have no problem gathering signatures to put it on the ballot.
But if it’s an idea that would NOT be supported by the people, we can see why the Institute would want to have lawmakers do it to try and lend it some legitimacy. I have a feeling, though, that since the Republican-controlled legislature AND the Democratic Governor both decided that using Rainy Day Funds this year was not in the state’s best interest, they would not support legislation next year to put on the ballot a way to make it easier to access the state’s savings account.
Another wrong-headed recommendation is trying to stave off any decrease in the income tax rate. The 5.5% rate would drop to 5.25% if revenues were to increase by 4% this year. The Institute laments that “this tax cut alone would reduce FY ’11 revenue by over $100 million.” Here’s the fallacy in that logic: if state revenues increase by 4% to trigger the tax cut, that would mean the state is taking in another $262-million! Where’s the revenue reduction?
Let’s not forget that while the state would be “losing out” on collecting another $100-million, state taxpayers would be benefiting to the tune of $100-million! What do you think would happen to that extra $100-million in taxpayers’ pockets? Think some of it might be spent or invested in the state, thereby improving the economy?
Oklahoma is doing far better with its budget than states like California and Illinois which are still facing deficits even with federal stimulus money. That happened because of prudent action by the legislature and the Governor, NOT by listening to tax-and-spend ideas spouted by the Oklahoma Policy Institute.
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