Please Join Me In Voting YES on State Question 708

By State Treasurer Robert Butkin

State Question 708, on the November 2nd ballot, will help us control state spending and build a bigger and stronger lock box to protect vital public services during economic downturns.

Our YES votes will limit pork barrel spending and help prevent future occurrences of the harmful budget cuts of recent years in education, health care and other vital services.

Eighteen years ago, Oklahoma voters approved a state constitutional amendment to create a “rainy day fund”. Deposits are made to the fund when our economy is stronger than expected and state revenues exceed original estimates.

The rainy day fund can be used during economic downturns to cushion budget cuts and for emergencies. This is similar to a family saving for a medical emergency or to put food on the table and pay utility bills in the event of a reduction in family income.

Between 1989 and 2001, Oklahoma experienced economic growth and deposits of more than $1.1 billion were made to the rainy day fund. When the national recession hit Oklahoma in fiscal years 2002 and 2003, we faced big budget cuts to balance the budget.

Unfortunately, the rainy day fund was almost empty when we needed it the most.

How could this happen? The answer is surprisingly simple. While half of the rainy day fund can be spent each year for emergencies, nowhere in the constitution is the term “emergency condition” defined. It's anything the politicians agree to call an emergency. Nor is there any requirement that emergencies be limited to times of economic downturns.

Rather than conserving our rainy day fund for the hard times, legislators and governors of both political parties tapped the rainy day fund during the good times.

In fact, in years where more money was available than the year before, the legislature spent more than $700 million from the rainy day fund for so-called emergencies. The result was that the fund was significantly depleted when the budget crunch came. Only $72 million remained at the beginning of Fiscal Year 2003, when Oklahoma faced a budget shortfall of more than $300 million.

Reckless pork barrel spending is only one source of this problem. Some of these so-called emergencies such as construction of new golf courses would be highly questionable under any standard.

At the same time, much of the spending for emergency conditions went to projects that many Oklahomans would support roads, prison construction, and higher education. The key concern is not necessarily with the merits of the projects themselves, but with a system that depletes our reserves in good times and forces dramatic budget cuts in tough times.

State Question 708 will improve our balanced budget requirements by reserving most of the fund to cushion the effects of an economic downturn.

Under SQ 708, the total available to cushion budget cuts increases from 50 percent under current law to 75 percent under the new law. The remaining 25 percent would be available for emergencies.

Had SQ 708 been in effect, an extra $100 million would have been available to cushion the budget cuts we faced in fiscal years 2002 and 2003.

State Question 708 is not a budgetary cure-all, but its passage will limit how much money the legislature and governor can spend whenever they decide to declare an emergency.

Please join me in voting YES for State Question 708 on November 2nd to bring state government spending more under control.

 

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105 W. Main Street
Boise City, Oklahoma 73933-0278
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Fax: 580 544-3281
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