House GOP Asks “Where’s Rainy Day Fund?”

Press Release from Oregon Republican House Office, 1-30-07

HOUSE REPUBLICANS ASK: WHAT HAPPENED TO TALK OF A RAINY DAY FUND?

SALEM”” Oregon House Republicans today renewed their call for an effective “rainy day” fund with sufficient reserves to prepare for future budget shortfalls. While the majority Democrats are proposing $800 million in new taxes despite record state revenues, Republicans are concerned the discussion has shifted away from responsible spending and planning for future needs.

“Judging by their proposed spending, Democrats must not think it will rain again in Oregon ,” said House Republican Leader Wayne Scott. “We are in the fourth week of session, and the majority party has yet to present a serious proposal that protects Oregon from the next economic recession.

“House Republicans are prepared to lead, and we’re developing a rainy day fund that’s built on current revenue and that establishes strict limits on how the funds should be tapped.”

Gov. Ted Kulongoski has presented the Democrats’ only rainy day proposal, which “diverts” the corporate kicker rebate into a reserve fund. The Governor’s proposal sets aside $275 million, a level that amounts to only 1.8 percent of General Fund expenditures.

At least 20 states have rainy day funds of 5 to 9.99 percent of General Fund expenditures. Thirteen states have rainy day funds of 10 percent or more. Oregon ‘s lack of a rainy day fund contributes to the state’s credit rating, which is among the worst in the nation and results in higher borrowing costs for taxpayers.

“A rainy day fund only works when it has sufficient revenue to protect against future budget shortfalls,” Rep. Scott said. “The Legislature has an opportunity to prepare for the next rainy day, but the Democrats are leaving their umbrellas at home.”

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