Expanding Emergency Fund
Oklahoma City, OK – With the state facing a historic budget shortfall, Gov. Brad Henry today renewed his drive to expand Oklahoma's Rainy Day Fund, a proposal he first pursued in 2006.
The governor said he will again ask the legislature to help him remove a constitutional cap on the state savings account so that more money can be deposited in it and saved for times of fiscal crisis.
"Oklahoma voters did the right thing when they established a rainy day account back in 1985, but unfortunately, a cap on the fund prevents Oklahoma from saving enough money for the kind of emergency we are facing today," said Gov. Henry.
"Now more than ever, it's time to expand the account and put more dollars away for future rainy days. You can never go wrong by depositing more money in your savings account."
The Oklahoma Constitution limits the constitutional reserve fund to 10 percent of general revenue receipts. Gov. Henry wants the cap raised to 15 percent.
The governor made the same proposal in 2006, but state lawmakers rejected the idea. Had the legislature and voters approved the measure in 2006, Oklahoma would have almost $900 million in the Rainy Day Fund today, instead of the current $600 million, according to state estimates.
With the state now experiencing a historic budget crisis and reserve funds in high demand, Gov. Henry said he hopes his idea is more popular this year.
"If we had taken the action I advocated back in 2006, we would have more money in our savings account to respond to today's crisis. It would not solve all of our problems, but it would give us more room to maneuver as we balance the budget and attempt to protect core services," he said.
Because the proposed change would alter the Oklahoma Constitution, the governor's proposal must be approved by both the legislature and Oklahoma voters.
This isn't the first time Gov. Henry has proposed improvements to the Rainy Day Fund. In 2004, Oklahoma voters overwhelming approved his proposal to tighten spending restrictions on the reserve fund.
The governor suggested those restrictions after inheriting a Rainy Day Fund that was virtually empty when he took office in 2003. The account was filled to its constitutional capacity for the first time in 2005 and has remained at capacity since then.