Rainy Day Fund. Yea or Nay?

Rainy Day Fund. Yea or Nay?

I have had a large number of e-mails and phone calls in the last couple of weeks, mostly from educators encouraging us to dip into the rainy day fund to help shore up education funding. Now, let me preface this discussion by saying this is my opinion and what I would like to see and it is in no way any position of anybody but Don Armes. I am one vote out of 101 house members. If I were king for a day, we would probably have already accessed the Rainy Day Fund and tried to plug some financial holes.

My opinion is that the Rainy Day Fund was set up for times just like these. It is a savings account for when funds are short. I think the best way to try to explain the philosophy is to tie it to your personal finances. If we are financially prudent in our home budget, we typically would rat hole some money for emergencies like a washer breaking down, or a car repair, or a roof on the house. Hopefully we have a little stash for when those things hit. If the state budget was your house, you would probably be careful what you spent that money on. You would probably ask yourself some questions like “do I really need that? Can we live without it? Or, is it a good enough reason to take money out of savings?” As I see this situation, that is exactly what is happening on a state level.

I personally wish the Rainy Day Fund was larger. I wish that when we had plenty of money a few years ago, we would have increased the size of that bucket. The financial crisis we are dealing with now is a perfect example of why that is so important. It is real easy when we have lots of money floating around to say “oh no, let’s not save any. Let’s go ahead and buy what we need this year”. But, it is not the wisest financial move one could make. If it were your savings account and your personal money, you would be careful that you did not burn it on something non-essential. I truly believe that is why the Governor, the Speaker of the House and the Pro Tempore of the Senate have been hesitant to break the seal on the jar that is the Rainy Day Fund. You know how it goes at your house. Once you break the seal, it is hard to keep the money from pouring out. Priorities have to be set and many times families might even discuss whether it is a necessity or not. Not to over-simplify, but that is kinda what we are doing as a state right now. We are carefully weighing our options and trying to make sure that when we make that move, we get as much bang for our buck as we can.

As I said earlier in the column, I believe it is time. I believe that there are some major holes and some very important programs that we need to try to slow the bleeding on. I personally feel that education is worthy. I personally feel that senior nutrition is worthy. We have lots of other areas that are equally as important to the overall machine that is the state of Oklahoma. The problem is there is not enough money to fill all the holes that need filled. When the budget was set last session, every attempt was made to hold education harmless, which simply means that other programs would be cut and education left alone. Now that those revenues have declined well below estimates, that does not look possible. So, to put it in home-owner terms, the washing machine is broken and it is time to go to the savings account. The washing machine is an essential part of the home. A new, big-screen television might not be, or a new car just because you want one. But, yes, the washing machine is probably a worthy expenditure of that savings account. I think education is probably a worthy expenditure, though we will not be able to buy all we need to buy simply because there is not enough there. We may only be able to “repair” the washer. We may not be able to buy a new one.

Now, if you are teacher and you send me an e-mail getting on to me and saying “you must not care about kids”, I will be offended. I spent 13 years of my young adult life in the classroom. I taught through lean years and I taught through years that we had money for things we wanted and needed. I taught in a very small school as well as a larger school. To put it bluntly, I get it and I care. I have children and they go to public school. I am gonna give you another opinion. That opinion is that we will probably address the Rainy Day Fund as soon as we start session. At least that is my hope. We will go in and address the situation and do what needs to be done for an essential program. Now, as I said before, I am one guy and there may be some people who disagree with that. But, I believe the savings account was put in place for times like this. I do not believe it is financially irresponsible to go to that savings account. I believe that one of the reasons there was hesitation, in addition to waiting on revenue numbers, was also the cost of convening the legislature because special session is not cheap. I believe it is around $100,000 a week. I think there was a lack of desire to spend that money unnecessarily and that is probably wise.

I do think it necessary for my constituents to know how I see it because you are going to hear a lot of things and I want to tell you that this budget crunch is real. It is serious and it is not going to improve immediately. I hate this extreme cold but one good thing about it is that it is driving the natural gas price higher. Hopefully that will help refill some of those buckets. Remember that the money we are spending is your money, not ours. You paid it in the form of taxes and we need to be careful how we spend your money.

If you would like to contact me while I am at the capitol, please do not hesitate to send an email to donarmes@house.gov or call me at 1-800-522-8502.

And here’s a little something to think about as you go down the road:

“Economy does not lie in sparing money, but in spending it wisely.” -Thomas Huxley