By Miranda Davis
KU Statehouse Wire Service
TOPEKA – Organizations this week advocated for a bill that would create a rainy-day fund to provide a financial cushion for state budget shortfalls.
The budget stabilization fund could be used during times of economic downturn, advocates said. Money from the fund, which would be created by July 1, 2017, could only be allocated with approval of the legislature or the state finance council.
The bill, which was discussed Friday in the House Appropriations Committee, does not specify where the money would come from but mandates that the budget committee determine that before the fund is created.
The Kansas Chamber United for Business, the Pew Charitable Trusts, and the Kansas Center for Economic Growth (KCEG) all support the creation of a rainy day fund, but KCEG doesn’t think creating the fund is feasible right now.
“It is simply not realistic, given the fiscal crisis we are facing, to divert state revenue to a rainy day fund before we address the ongoing structural imbalance with our budget and achieve the statutorily required ending balance,” said Annie McKay, KCEG executive director.
Stephen Bailey, senior associate for the Pew Trust, said the fund is considered a best practice, and if Kansas creates one, it would join 46 other states that already have such funds.
“Just as families create rules for how and when to use their savings account versus their checking account, a rainy day fund will allow Kansas to be clear, in law, about the purpose and objectives you’re trying to achieve through saving,” Bailey said.
The legislation not only would mandate the creation of the fund but would also require the budget committee review and make recommendations on the fund during the 2016 fiscal year.
Rep. Henry Helgerson, D-Wichita, supported the fund, and said it can benefit both Democrats and Republicans.
“The reason you want to have that money there is because it protects the programs from the downturns,” Helgerson said. “You don’t go immediately in and start slashing programs for the needy. You have some cushion. The other side of it is, with the conservatives or the Republicans, you don’t want to put the state in a situation where you have to raise taxes.”