Starr offers rainy day fund alternative to Governor proposal

PRESS RELEASE FROM SENATOR BRUCE STARR

This February, Senator Bruce Starr (R-Hillsboro) is offering an alternative to Governor Ted Kulongoski’s rainy day fund proposal. Starr will again introduce a bill that would put 3% of state revenue into a savings account at the beginning of every budget cycle. Governor Ted Kulongoski (D) has proposed changing the state constitution to allow use of Oregon’s kicker money for a rainy day fund.

“This plan is simple: on payday, the state sets aside 3% of its paycheck for a rainy day,” said Starr. “This follows the same type of common sense principles any financial planner would give an Oregon family. Put money away before you start spending it.”

The Governor’s plan would threaten the state’s kicker law, which returns revenue to taxpayers that is collected over projections. In addition, the Governor’s plan would only save money when tax collections over-shot a projection, meaning that some years no money would be saved at all.

Starr’s proposal, in addition to putting 3% of state revenues into a savings account for tough times, also limits the amount of money the legislature can take from the savings account at one time.

“The kicker is an asset to Oregon families and the economy,” said Starr. “It is also a way to stem the tide of government spending. Taking the kicker is a poor solution to a problem that really requires careful savings and prioritized spending.”

Starr noted that a strong savings account was desperately needed following unsustainable spending and the resulting bitter tax fight. By making savings the first expenditure in a budget cycle, Starr’s savings account would force legislators to make choices about what spending is most important and to protect against future shortfalls.

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Posted by at 03:57 | Posted in Measure 37 | 3 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Steve Plunk

    Let’s add education as a first priority as well. A financial planner would say pay your most important bills first and save the luxuries for last of you have anything left over. The legislature has been doing it wrong.

    I’ll give the Guv my kicker if he’ll put a spending cap in place. Population growth and inflation.

  • Davis

    Finally, a legislator who gets it and is willing to do something! A rainy day fund is a BUDGETARY issue, not a REVENUE issue. The money that gets kicked back to taxpayers is money that government has NO business confiscating since they had no idea that it was coming. The legislature has ALWAYS had sufficient authority AND money to set aside whatever amount they deemed appropriate to build a savings account from which they could draw in financial emergencies.

    The constitution’s provision for the kicker IS the spending cap, to-wit: The legislature shall not spend more than what it budgeted as based on revenue projections (plus a 2% fudge factor), period. Sounds clear enough to me.

  • Jan

    The state has wasted its’ windfall profits from the tobacco settlement in 1998. Those funds are committed to bond payments through 2014. Once that obligation is paid off, here is the Rainy Day Fund. It needs to be locked up tight and allowed to grow for five or ten years then use only the investment income to balance the budget.

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