Governor's Budget: Rainy Day Fund
As part of his budget package, the Governor proposes socking away a big chunk of money in a rainy day fund. From the Statesman-Journal:
Kulongoski boasted that his proposal will enlarge reserves to the highest level ever in Oregon. Reserves would grow from $232 million in July 2007 to $902 million at the end of the two-year budget cycle. That's about 6 percent of the general fund, Kulongoski said, though he conceded it would be desirable to get reserves up to 10 percent to 15 percent of the general fund.The quickest and, some would say, most businesslike way to get reserves that high, would be to suspend the $1.1 billion in personal income tax kickers, which derived from unexpected tax revenues in 2005-07. But Kulongoski said there's no political will in the Legislature to touch those rebates.
Discuss the rainy day fund and the personal kicker here. Discuss the rest of the budget proposal here.
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Dec. 05, 2006
Posted in in the news 2006. |
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11:29 a.m.
Dec 5, '06
Does anyone know how the funding from the general fund into the kicker works? For this exercise I am excluding the corporate kicker money.
My concern is that we are potentially now at a peak in our economic outlook for the coming session and the revenue may well shrink over the next two years. If we put funds into the rainy day fund and it starts to sprinkle in the next two years can we access it or must we cut first? I am concerned that while the forecast two years ago was too pessimistic, this one may be too optimistic. I would like to see a budget that assumes that some of the funds will not be there and is just "not spent", but could be added into the emergency fund or at the end of the budget cycle put into the rainy day fund, but which is also available to this legislature if it sees later that the funds are available.
Dec 5, '06
I've little doubt that the easier it is to tap into any proposed rainy day fund, the more that opponents will be able to equate it to a tax increase, irresponsible government spending, etc. and energize voter resistance. The legislature will need to craft the proposal(s) wisely to avoid such problems. The fund truly needs to be for lean times.
Dec 5, '06
John Calhoun asks:
"Does anyone know how the funding from the general fund into the kicker works? For this exercise I am excluding the corporate kicker money."
John. I'm not sure what question you're asking here. Are you asking how the "kicker" works (i.e. what triggers it)? Or are you asking a different question. I understand how the kicker is triggered and could take a stab at explaining it, but I don't want to waste the bandwidth if you're asking a different question.
mrf
4:35 p.m.
Dec 5, '06
MRF,
Thanks for responding. It is now obvious that I was not clear. The question really is: for this session, if the legislature puts money into the fund (not from the corp. kicker proposal, but from other sources) can it take it back out in the same biennium with a lesser standard of need than in the proposed kicker rainy day fund.
Again my concern is that the revenue will fall short of the current forecast/budget and if money is set aside that is really needed to keep the current budget afloat is it available?
3:56 p.m.
Dec 7, '06