Fellow Grassroots Texans:
We write to inform you that there are moves underway by the Texas House Republican Leadership to raid the Texas Economic Stabilization (‘Rainy Day’) Fund in order to avoid further spending cuts.
Conservatives are advocating cuts in spending to address the current budget shortfall. Other groups are advocating spending all or part of the Rainy Day Fund, either alone or in combination with additional taxes.
In 1989, the Texas Legislature established the Texas Economic Stabilization Fund, commonly referred to as the ‘Rainy Day Fund,’ to provide for an economic buffer in the event of an emergency, natural disaster, or other unforeseen circumstance.
Its boring (real) name is the Economic Stabilization Fund. It was established in 1989 after the oil bust, and it’s basically a giant savings account. The fund is replenished every year with natural gas and oil tax revenues. Any tax revenue taken in above the amount collected in 1987 is split: 25 percent goes into the state’s general fund and 75 percent is deposited in the Rainy Day Fund. The comptroller estimates the fund will have $9.4 billion available for the 2012-13 budget that lawmakers are currently writing.
SHOULD THE STATE LEGISLATURE RAID THE FUND?
As noted, the Texas House Republican Leadership is proposing that we raid the Rainy Day Fund in order to avoid the need for deeper spending cuts in the state budget. Republican Appropriations Chair Jim Pitts had earlier expressed support for raiding the fund:
More recently, Republican Rep. John Zerwas, a member of the Tea Party Caucus, explained that he was ‘absolutely’ in favor of raiding the fund:
Rep. Zerwas’ and his fellow ‘raiders’ have drawn heavy criticism from conservatives, including Empower Texans:
While budgeting this session, Texans don’t need something to take the “edge” off; and we certainly don’t need the type of medicine that drains the Rainy Day Fund of almost 90% of it’s value. In a tight economic climate, Texans expect bold conservative leadership to responsibly trim and limit government. Dulling the pain might be nice for a time, but it does nothing to solve the problem.
Dr. Zerwas’ prescription might make his job easier today, but would make the state’s job harder in the future. Texas voters aren’t interested in delaying the kind of surgical procedures needed to keep Texas fiscally healthy.
The Austin American-Statesman presents a different point of view:
Texas’ $9.4 billion rainy day fund has never looked so plump, so ripe for the picking given the state’s budget crisis.
Record sums have accumulated in the state’s savings account, formally known as the Economic Stabilization Fund. And the state budget, facing a $27 billion shortfall, could use some stabilizing, say educators, employee groups and advocates for disabled Texans.
According to an investigation by Texas Tribune, the overwhelming majority of the insiders they’ve spoken to believe the legislature will raid the Rainy Day Fund.
Where does your State Representative stand on this question? (Find out here)
Where do YOU stand on this question? (SOUND OFF below!)