Budget & Tax
Cost Avoidance #10: Legally access the rainy day fund
October 3, 2017
#10) Legally Access the Rainy Day Fund
Oklahoma has a Constitutional Reserve Fund, more commonly known as the Rainy Day Fund, for such a time as this.
It’s worth remembering that foreign nations intentionally drove down the price of oil in hopes of harming Oklahoman and other American businesses. The resilience of our free market system blunted some of the impact, but still many Oklahomans have paid the price.
When the economy is down, so are tax collections. As Curtis Shelton has explained, it is the economy much more than tax rates that explains most of the recent fluctuations in state personal income tax revenues. (And after tax cuts in 2005 and 2006, revenues jumped.)
Earlier this year I wrote about how Oklahoma’s Constitutional Reserve Fund works and how not to take money out of it. But unlike the executive branch, the legislature has the power to use the Fund to patch up the budget in order to avoid harming taxpayers.