Door Opening to Use of State's Growing 'Rainy Day Fund'

0

Lt. Gov. David Dewhurst, the presiding officer of the Texas Senate, has opened the door to legislative action in 2013 to tap into the state's rapidly growing “Rainy Day Fund,” which is on track to put more than $11 billion at the disposal of the legislature through 2014-2015. The reserve fund is growing at a rapid clip as the state economy rebounds from recession and oil and gas production–the main source of the revenue filling the fund-keeps booming.

Dewhurst's idea is to use a billion dollars from the fund for a new state investment in water infrastructure, plus some more for transportation. Setting aside the merits and demerits of these particular ideas, his proposal marks a major change in the tune being sung by the state leadership about using the Rainy Day Fund. Until now, top state leaders have talked as if that reserve should be off limits, and their intransigence blocked the potential use of the fund last year to avoid deep and needless cuts in education.

Gov. Perry in particular has come up with one rationale after another for leaving money in the fund instead of using it as intended to make up for unforeseen revenue shortfalls resulting from an economic downturn. Perry at times has suggested it should only be reserved to cope with natural disasters. He also has said it should not be used for ongoing expenses, only one-time purchases, even though the fund automatically replenishes itself from oil and gas taxes.

These novel arguments have always been based on a mistake-or a deliberate misreading of legislative intent-regarding the purpose of the Rainy Day Fund. It's actually called the Economic Stabilization Fund, and (as the name implies) its original purpose, when approved by legislators and then by Texas voters decades ago, was specifically to tide the state over during economic slumps and make it possible to sustain vital state services until the economy-and tax revenue-recovered. In fact, the legislature has not hesitated to spend down the entire amount in the fund several times in the past-including at Gov. Perry's urging, when it suited him.  

So, now that the recently invented taboo against talking about spending from the Rainy Day Fund has been broken by Lt. Gov. Dewhurst, Texas AFT has a modest proposal:  For the 2014-2015 budget to be written next year, how about using the $11 billion plus projected for the fund to reverse the man-made budget disaster in education and other core public services that was needlessly caused by Perry, Dewhurst, and company in the 2011 legislative session?    

Source: Texas AFT

About Author

Leave A Reply

2014 © Burnt Orange Report All Rights Reserved. Do not republish without express written permission.

Site designed and developed by well + done DESIGN