Rainy Day Fund is separate from state budget
As reported, my comments at last Friday's Nevada Chamber luncheon need a minor correction. The correction involves the difference between a budget surplus/deficit and the Missouri Rainy Day Fund.
The Rainy Day Fund is a distinctly separate fund from the budget and functions pretty much as it sounds -- money set aside for a rainy day. Since January 2005, the General Assembly has increased the Rainy Day Fund by approximately $155 million bringing the balance in the Rainy Day Fund to $555 million. The 1993 flooding was the last time the Rainy Day Fund was used. Usually, Missouri governors are very reluctant to use the Rainy Day Fund for budget corrections. One Democratic State Representative and one Democratic State Senator have written Governor Nixon urging him to use the Rainy Day Fund for budget shortfalls. Whether the Governor decides to use the Rainy Day Fund remains to be seen. Both the Governor and the General Assembly are restricted as to how much of the Rainy Day Fund can be used in the absence of a natural disaster.
On June 30, 2008, the last three budgets had produced surpluses totaling approximately $866 million. FY 2009 started well enough with Missouri being the only state that added jobs in September 2008. Then October hit with a drastic drop in anticipated revenue. Our budget analysts now predict a $300 million budget deficit on June 30, 2009. Maybe that is accurate, maybe it is not accurate; a lot of good and bad things can happen in the next six months. Missouri is one of only ten states still in the black. Other states, California, New York, and Illinois, to name a few, are facing budget deficits into the tens of billions of dollars and are standing in the bailout line. While our budget surpluses may be gone by June 30th at least we had the surpluses and Missouri is still in relatively good financial condition. Now, the challenge this session is to regain the solid financial footing we've enjoyed the last three years. The Speaker of the House, the Senate's President ProTem and the Governor seem to be intent on getting Missouri workers and their families back to work. Again, time will tell.