Oklahoma Rainy Day Fund and State Question 725
Allen October 13th, 2006
I will be out of town when 7 November rolls around, so I will be voting via absentee ballot this year. One of the state questions is the following:
STATE QUESTION NO. 725 LEGISLATIVE REFERENDUM NO. 340
This measure amends the State Constitution. It amends Section 23 of Article 10. The measure deals with the Constitutional Reserve Fund also known as the Rainy Day Fund. The measure allows money to be spent from the Rainy Day Fund. The purpose of the authorized spending is to retain employment for state residents by helping at-risk manufacturers. Payments from the Fund would be used to encourage such manufacturers to make investments in Oklahoma. All such payments from the Fund must be unanimously approved by three State officers. Those officers are the Governor and the head of the Senate and House of Representatives. Those officers could only approve payments recommended by an independent committee. Such spending is allowed in years when there is Eighty Million Dollars or more in the Fund and other conditions are met. Such spending is limited to Ten Million Dollars a year. The help given to a manufacturer is limited to ten percent of its in-State capital investments. The Legislature could make laws to carry out the amendment.
In my former life, I was a programmer for a large manufacturer who pulled out of Oklahoma. This rainy day fund probably would not have kept them in the state, but I can certainly understand the allure of this idea.
Yet I couldn’t help but think this is another attempt to pony up taxpayer’s money to some politico and his cronies.
Since I hate voting for or against an issue without reading up on it, I thought I would see what people had to say about this proposal. I didn’t any opinions in support of or against this new proposal.
I did find out, however, why the issue is coming up for a vote.
The rainy day fund is at its maximum capacity. In other words, the money is burning a hole in someone’s pockets. It looks like the only other option would be to return the money to the taxpayers. Heaven forbid this should happen.
So I’m voting no on this issue. While the idea of keeping manufacturing jobs in Oklahoma is attractive, I think we would have a sudden rush of manufacturers who are thinking of pulling out of Oklahoma unless the taxpayers shell out. Generally speaking, you get the behavior you reward. This is rewarding the wrong type of behavior.
The last time money was spent out of the Rainy Day Fund was 2003 (PDF). It’s amazing how much it rains when you have a rainy day fund.
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