Budgeting 101 tells us to plan for the unexpected by setting aside some of our dollars in a rainy day fund. If we do, when hard times hit, we're prepared. We've got the bucks in the bank to cover replacing the roof that started to leak or the radiator in the family car. We have a financial safety net to carry us through the tough times.
As California continues to recover from one of the most devastating economic recessions our state has experienced, we all understand the need to continue to pay down our debt and take a measured approach to spending after years of budget deficits. Now that we are facing budget surpluses, we cannot forget the effects of years of deficits, which caused us to borrow from our schools, forced furlough Fridays, and made reductions in social services that millions of California families depended upon.
Recently, the Senate unanimously passed a rainy day fund measure to set aside 1.5 percent of the general fund each year to protect you, the taxpayer, from this happening again. I am very proud of my contributions to this measure, and it could not have done it without the collaboration and support from Governor Brown and fellow lawmakers on both sides of the aisle.
This measure is an example of our state Legislature's commitment to getting California back on track by being more fiscally responsible. This is a great example of government working in a bipartisan fashion to avoid the budget rollercoaster that California has endured for the past few years - years that has taken its toll on our state and its taxpayers.
We worked tirelessly and together to ensure funds will not be used and abused for special interest projects and other programs, but instead, do what should be done - provide the necessary protection needed during economically hard times.
It's very important to me that we do not allow our state government to repeat past mistakes, for example, growing the base of state spending in "boom" revenue years with no plan or ability to sustain that growth. Additionally, I was determined to make sure once the money is placed in the fund, it could not be easily removed without real economic justification. This is reflected in the measure.
The criteria in this Rainy Day Fund Plan will help ensure one-time money is limited to one-time purposes, such as building a reserve and paying off debt. It also provides the needed protection for California families against runaway spending and the often inevitable tax increases that follow.
We set out to ensure this reserve would guarantee annual transfers into the fund so money would be there when we need it. With the failed attempts at a rainy day fund in the past, this is a strong bipartisan package that will truly provide what Californians deserve.
I am proud that the Legislature and the governor continues to work together in a bipartisan way, thinking about future generations instead of our own immediate needs - and this is how it should be.