Oklahoma City, OK 73105
For Immediate Release: May 26, 2016
Sen. David Holt
Improved State Budget Savings Plan Heads to Governor
The Senate has passed HB 2763, which creates the Revenue
Stabilization Fund, with the intent of preventing future budget
shortfalls like the one the state is currently experiencing. The
authors are Sen. David
Holt, R-Oklahoma City, and Rep. John Michael Montgomery, R-Lawton.
It passed the Senate 44-2 and now awaits the governor’s consideration.
“One lesson I think we learned this year is that our current
savings strategy is inadequate to the challenges posed by an energy-based
economy,” Holt said. “This legislation will increase
our savings, which will give us a tool to address future budget
shortfalls. It is forward-thinking and is an appropriate response
to the lessons of this year’s budget crisis.”
"We have seen this year the need for a long term strategy
on how to manage our revenue and ensure a consistent ability to
maintain core government services,” Montgomery said. "This
is part of establishing a vision for the state of Oklahoma in which
we are able to take care of providing services without hampering
taxpayers in times of distress."
HB 2763 creates the Revenue Stabilization Fund, which could serve
as a first resort when revenue failures and projected shortfalls
occur. It does not save any funds until revenues have returned to
the same levels as Fiscal Year 2015. Savings would cease in any
fiscal year in which there is a revenue failure. The fund would
receive excess revenues from the gross production tax above a five-year
rolling average. It would also receive 75 percent of excess revenues
from the corporate income above a five-year rolling average. The
remaining 25 percent of those excess revenues from the corporate
income tax would deposit in the Rainy Day Fund. In the case of a
revenue failure, one-quarter of the fund could be spent by the director
of OMES and one-quarter of the Fund could be spent by the Legislature.
In the case of a projected budget shortfall in the upcoming fiscal
year, one-half of the fund could be spent by the Legislature. Every
five years, OMES will submit a report on the fund’s effectiveness.
Holt and Montgomery were also the authors of Senate Joint Resolution
44, which would have asked the people of Oklahoma if they would
like to increase the cap on the Rainy Day Fund by measuring it against
the total state budget. That measure failed in the House.
“Though it was disappointing to many that SJR 44 did not
advance, HB 2763 is also an excellent response to the problem of
not having an adequate savings account,” Holt said. “At
the beginning of this session, it was my goal to help Oklahoma get
on a better savings plan, and I think with HB 2763, we have definitely
accomplished something that future generations will appreciate.
I want to thank all those who made it possible to advance this complex
but important idea, especially Senator Mike Mazzei, the dogged Rep.
John Michael Montgomery, and the Pew Charitable Trusts.”
For more information,
Sen. Holt: (405) 521-5636