Steve King, introduced HB 1177 for consideration this legislative session. Considering the Great Recession that we are suffering through, the idea of a rainy day fund is a good one. My mother taught us how to put away a little money out of every paycheck so that we had a cushion when something unexpected happened. It is a good idea for governments to do this, and many states already have rainy day funds.
This bill should not be passed without amendment because it is structured in a way that would cause further spending cuts to essential state services. The un-amended bill requires that 10% of any increased revenue goes into a rainy day fund. No money could come out of that fund without a fiscal emergency being declared and without a 2/3 vote of the legislature.
Representative Kagen, who sits on the finance committee, said this about the bill, “I objected to the fact that only one year of increased revenue was enough to trigger the deposit into the rainy day fund. I argued that we should have to have three consecutive years of increases in revenue before a proportion of the increase … had to be put aside. To illustrate my point, I urged we consider the present. We're projected to have an increase of revenue next year of about 280 million dollars. Under the King bill, we'd have to put 28 million of next year's revenue into savings. But that would be crazy. We'll need every penny next year, and just won't be in a position to start funding state savings until we've had two or three years of revenue increases. In the meantime, we need to repair roads and bridges, re-hire teachers we've fired, restore Medicaid funding, and so on. “
The bill was voted out of committee, and will now be debated on the floor of the House. Despite voting to move the bill forward, Representative Kagen says that he is not decided about voting on the final bill, “ But I applaud Rep. King for bringing this forward: we HAVE to address this question so we don't fall back into the same old habits once our economy recovers."
This bill should not be passed without amendment because it is structured in a way that would cause further spending cuts to essential state services. The un-amended bill requires that 10% of any increased revenue goes into a rainy day fund. No money could come out of that fund without a fiscal emergency being declared and without a 2/3 vote of the legislature.
Representative Kagen, who sits on the finance committee, said this about the bill, “I objected to the fact that only one year of increased revenue was enough to trigger the deposit into the rainy day fund. I argued that we should have to have three consecutive years of increases in revenue before a proportion of the increase … had to be put aside. To illustrate my point, I urged we consider the present. We're projected to have an increase of revenue next year of about 280 million dollars. Under the King bill, we'd have to put 28 million of next year's revenue into savings. But that would be crazy. We'll need every penny next year, and just won't be in a position to start funding state savings until we've had two or three years of revenue increases. In the meantime, we need to repair roads and bridges, re-hire teachers we've fired, restore Medicaid funding, and so on. “
The bill was voted out of committee, and will now be debated on the floor of the House. Despite voting to move the bill forward, Representative Kagen says that he is not decided about voting on the final bill, “ But I applaud Rep. King for bringing this forward: we HAVE to address this question so we don't fall back into the same old habits once our economy recovers."
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