by Max Brantley
On the jump, Arkansas Advocates for Children and Families applauds the idea Mike Beebe mentioned on the radio today -- that he supports creation of a state "rainy day fund" to guard against economic downturns.
More interesting -- because the rainy day fund is worth a full discussion on the value of a graduated revenue stabilization act rather than a rain day fund, the philosophical argument of cutting taxes rather than piling up surpluses for whatever purpose, etc. -- is Beebe's statement that he hasn't made his mind up yet on the state lottery.
Gov. Mike Beebe today called for a rainy day fund to prepare for possible economic hard times, the Arkansas News Bureau reported.
Our research has shown that such a fund would benefit Arkansas in several ways:
It’s good for business. Uncertainty about the quality of public services and changes in the tax system make the state a less attractive place to live, work and invest.
It’s good for long-term capital investments. States with well designed rainy day funds have better bond credit ratings, which translate into lower costs for capital improvements.
It’s good management. It allows for better public management in state agencies, allowing the focus to shift from crisis management to meeting the long-term needs of Arkansas families.
It’s good government. A rainy day fund of adequate size, with appropriate withdrawal and replenishment rules leaves more time to focus on good government.
Click here to read our full policy brief.