The latest government to consider setting up a SWF is…Oklahoma? That’s right. According to Tim Talley of the AP in Oklahoma City:
“Oklahoma House Speaker Chris Benge said Monday he is studying the need for an energy stabilization fund to mitigate the financial fallout from volatile oil and natural gas prices.”
The fund would be similar to other stabilization funds in that it would sequester excess revenue when prices were high so as to distribute it when prices are low. Due to falling tax receipts from the economic crisis and ‘low’ commodity prices, the state is facing a revenue shortfall of more than $729 million.
Remarkably, Oklahoma already has a $600 million “Rainy Day Fund” (who knew?) drawn from the general state revenues. So, this proposal would be for the state to create another fund, which would specifically target budget gaps. Policymakers view the Rainy Day Fund as being restricted for more serious incidents (i.e. natural disasters).
Apparently, we need to start counting Oklahoma among the U.S. states that sponsor SWFs, such as Alaska, Alabama, New Mexico and Wyoming. Indeed, if the above policy is implemented, Oklahoma will have two SWFs with separate sources of revenues and separate mandates.
SWFs are as popular in the Mid-West as they are in the Middle East!