Rainy Day Fund

According to the Denver Post, the legislature may consider setting up a rainy day fund. I think this is a good idea, as long as they set some practical guidelines for using it. Here are a few: The rainy day fund 1) can only be used when the current year general fund revenues will be less than the previous year; 2) can't draw more than 33 percent of the balance in the fund for any one year; 3) can only be used for general fund budget items; and 4) must be the first item replenished when general fund revenues exceed the previous maximum revenue. As to size, perhaps between 5 and 10 percent of the general fund should be sufficient. That will mean a pot of between 350 and 700 million dollars.

I suspect more than a few libertarians will be opposed to this idea, but there are some benefits. It will prevent (or lessen the likelyhood of) battles like we had over Referendum C. It is prudent to have some savings to tide you over any rough spots. If they establish it soon enough, it will prevent the legislature from flushing all the money down the toilet.