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Rainy Day Fund on Ballot

October 21, 1996
By: David Freitas
State Capital Bureau

Among the seven ballot issues that will be decided on November 5th is one called the Budget Stabilization Fund.

While the measure is largely related to government activity, it will have an impact on Missouri.

David Freitas found out what the measure, nicknamed the "rainy day fund," is all about.

Story:
RunTime:
OutCue: SOC

In order to plan for the unexpected expenses in life, many of us sock money away in savings accounts.

That money can come in handy when a car needs repairs, or when there is a major natural or personal disaster.

Now, the State of Missouri is trying to prepare for the unexpected as well.

The Budget Stabilization Fund measure creates a --rainy day-- fund that puts about two percent of the annual general revenue aside for "just-in-case" kind of situations.

The senate sponsor is Larry Rohrbach.

He says the measure is what any normal family does when things get shaky.

Actuality:

RT:34

OC:

FILL: "The state "rainy day" fund or as its formally called the Budget Stabilization fund is a fund to be used when the revenues don't meet expectations and that happens fairly regularly when the economy is on the low side of the cycle... or if we have a disaster with some unusual expenses or the earthquake that we may someday have here in Missouri."

Rohrbach says a fund similar to this already exists in Missouri.

But the amendment that voters will be deciding on would change it slightly... making the measure a part of the State Constitution.

That amendment would make the fund mre difficult for state officials to ignore.

Another part of the change would make it mandatory to pay money back to the fund after it is used.

And the head of the Office of Administration, Dick Hanson, says that is a simple change.

Actuality:
RunTime: 10
OutCue:
Contents: ""It won't cost us anymore, because the money is already in the fund. So its just a way of making sure its restored when it is used."

Hanson says the fund would have about 115-120 million dollars in it at all times.

So far the fund has had wide bi-partisan support.

The measure passed both houses without any dissenting votes.

And even the one gripe suggested about the fund the original sponsor of the bill, Representative Sheila Lumpe, has an answer for.

Actuality:
RunTime: 20
OutCue:
Contents: "Well you could spend that money today here you have a problem or need or something instead of putting it away for future emergencies. But it seems to me that a prudent family saves for emeregencies and this is simply the State doing the same thing."

Lumpe points out that about 25 other state have rainy day funds of their own.

Lumpe also sees this fund as a way to prepare for future governmental changes.

Actuality:
RunTime: 27
OutCue:
Contents: "Another item we were looking at was what might the Federal budget changes mean for the State of Missouri, and would we be able to have some money set aside that should there be greater burden on the state we would be able to draw from that savings from so to speak."

The burden that Lumpe mentions can often fall on the taxpayers.

Senator Rohrbach says this fund could help ease that burden.

Actuality:
RunTime: 16
OutCue:
Contents: "I've seen us, in response to a temporary downturn in revenues, end up with some permanent tax increases. So from the perspective of a tax payer, which we all are, this is a good plan because it will hold down the pressure for those tax increases because of a temporary downturn in revenue."

Rohrbach says the fund is not as big as he would like it to be, but says it will help out just the same.

The Budget Stabilization fund sounds confusing at first... but Rohrbach says the good sense of the fund is biblical.

Actuality:
RunTime: 25
OutCue:
Contents: "This is wisdom that's as old as the Old Testament where Joesph had a interpreted a dream that said we need to set grain aside here in Egypt during the fat years because lean years are coming... and they did that. And that's what this is about this is setting some money aside so when you need it most you've got it.. and that's good for education, it's good for corrections it's good for every agency of state government."

Voters will have a chance to choose this so called ancient wisdom next month at the polls.

For K-B-I-A's Capital Edition, I'm David Freitas