C.B. Forgotston: Flaw in "Rainy Day Fund"?

http://forgotston.com/

I just read where Commissioner of Administration Angele Davis said there was a “design flaw” in the Budget Stabilization Fund (a.k.a. the rainy day fund). (See story here.) As a result there would be little to no net revenues for the upcoming state budget if the leges used $250 Million of the fund.

There is no "design flaw." The fund was intentionally crafted to limit the flow of oil and gas revenues into the State General Fund ("SGF") in hopes that the state would reduce it's dependency on oil and gas revenues.

Alternative solution

If there is no desire to reduce the dependency on oil and gas revenues, there is alternative to refilling the fund.

The $250 Million taken out of the fund could be immediately replaced with $250 Million of the $860 Million 2007-08 surplus (per Const. Article VII, Section 10(D)(2)(d)) and thus all oil and gas revenues would continue to flow into the SGF and would be available for expenditure in the fiscal year that begins July 1.

This process has been used in the recent past to force more oil and gas revenues to flow into the SGF.

This scenario would increase revenues for the Operating Budget by $250 Million. There would, however, be less surplus money to spend on local and NGO capital projects.

If the goal is to forestall cuts to the Higher Education and Heathcare operating budgets this process accomplishes it.

Poor priorities not a flaw

Seems to me the only “design flaw” in the fund is the flaw that has always been in the state budget process -- poor priorities.

The comments from the commissioner begs the question of why are we just now learning of the "design flaw" in a fund that was originally put into the constitution in 1990 and was actually used in 2002? This is not her first time to work for a governor in the Division of Administration.

What am I missing?

C.B.