FUMO SEEKS HIGHER THRESHOLD FOR RAINY DAY FUND WITHDRAWALS
HARRISBURG, January 27, 2003 – State Senator Vincent Fumo (D-Philadelphia) has proposed a constitutional amendment to require the approval of a super-majority of the legislature to withdraw money from the Tax Stabilization Reserve Fund, better known as the Rainy Day Fund.
A two-thirds vote of the House of Representative and Senate is currently required under state statute, but that provision of law can be changed by a simple majority vote. That was done in 2002 when Republican legislative leaders, with the agreement of then-Gov. Mark Schweiker, temporarily altered the law and took $750 million from the Rainy Day Fund to balance the 2001-2002 fiscal year budget. It was done by majority vote, with almost a straight party-line margin in the Senate and limited Democratic support in the House.
"As recent history made obvious, if you have a two-thirds requirement that can be changed by majority vote, then you really don’t have a two-thirds requirement," Fumo said.
Fumo, who is the Democratic chairman of the Senate Appropriations Committee, said the intent of the original Rainy Day Fund law was to make sure that the state’s financial safety net was tapped only in cases of emergency or genuine economic distress.
"It was wisely written to ensure a clear, bipartisan consensus on the need to spend the people’s savings, and on the best way to spend it," Fumo said. "The Rainy Day Fund should not exist simply to make it convenient for the ruling party to get out of the red unilaterally.
"Unfortunately, in the last session the majority circumvented the spirit of the law. A constitutional amendment would prevent this from happening again," he added.
Under Fumo’s proposed amendment, money could be removed from the Rainy Day Fund with either of two types of legislative approval.
The proposal would also prevent more than 50 percent of the balance of the fund from being withdrawn in any one fiscal year.
Fumo introduced the joint resolution (SB 159) today in the Senate with 11 co-sponsors, all Democrats.
To become part of the Constitution, the legislation would have to pass both the House and Senate in two consecutive legislative sessions (this one and the one that will begin in January of 2005) then be approved by the voters in a statewide referendum.