Missouri’s Rainy Day Fund
Sunday, July 17, 2011 at 05:50PM | Shelley Keeney 
NEWS RELEASE --- From the Office of Representative Shelley Keeney - 156th District
| FOR IMMEDIATE RELEASE: |
CONTACT: Rep. Shelley Keeney |
| July 15, 2011 |
(573) 751-5912 |
Missouri’s Rainy Day Fund
Ever since a devastating tornado hit Joplin back in May, some questions have arisen over how to pay for the recovery efforts. One possibility is the state’s “budget reserve,” a.k.a. the “rainy day” fund. Several media outlets have made reference to the fund over the past several weeks and I have had constituents ask for information about it as well. This week's report is an effort to explain what the fund it and how it operates.
What we commonly know now as the rainy day fund in Missouri began as Senate Joint Resolution 25 in 1999, sponsored by then-Missouri Senator Larry Rohrbach. His proposal was placed on the state-wide ballot in 2000 and approved by 59 percent of the voters. This fund combined the “budget stabilization fund” of the early 1980s with the “cash operating reserve fund” that was created in 1986. The “rainy day fund” simply provides the state an ability to meet cash flow needs in times of emergencies or budget shortfalls.
The rainy day fund can be used to make cash operating transfers to meet the immediate cash requirements of the state without legislative authorization. These must be repaid by May 15, with interest, and no transfer can happen after May 15. The state routinely uses the fund for this purpose. For instance, in Fiscal Year 2011, $150 million was transferred to the general revenue fund in March 2011 and was paid back during April 2011.
This fund may also be used in the event of a disaster or to meet budget shortfalls within the current fiscal year. In both cases, the governor is required to request an emergency appropriation and both bodies of the General Assembly must approve the bill by a two-thirds vote. The money must be repaid, along with interest, in equal payments during each of the following three fiscal years.
The fund has been used to maintain cash flow and has never been used to stabilize the budget. Before the rainy day fund existed, money was appropriated in 1993 in response to widespread flooding. A special session was called in the fall of 1993 and $16.1 million was appropriated by the General Assembly to finance reconstruction after the flood.
Whether or not the rainy day fund will be tapped into to help pay for the Joplin tornado or flooding along with Missouri River remains to be seen. We hope to have a better answer before lawmakers return to Jefferson City for the annual veto session in September.
The Madison County Chamber of Commerce meeting was very enjoyable this week and I appreciated the offer to talk to the group. I also participated in the disaster recovery committee hearing in the St. Louis area on Friday where committee members heard from citizens.
Please let me know if you would like to receive my weekly updates via electronic E-Mail, by sending an email with your name to: Shelley.Keeney@house.mo.gov
As always, I appreciate hearing your comments, opinions and concerns about state government. Please feel free to contact me in Jefferson City at (573) 751-5912. You may write me at: Shelley Keeney; Missouri House of Representatives; State Capitol -- Room 313; 201 W. Capitol Avenue, Jefferson City, MO 65101-6806 or email me.