At the beginning of each legislative session since I have been Comptroller, I have said Texas government needs to budget like any good Texas family – spend wisely, invest wisely and save for a rainy day.
10 Principles for Texas
in the 21st Century
Develop a better-educated workforce
Direct more of every education dollar into the classroom
Raise the bar on student performance
Cut taxes in Texas
Introduce competition into Texas government
Improve government performance and accountability
Reduce the size of government
Bring common sense to regulations
Use technology to cut costs and increase quality
Return control to communities and individuals
Back in the 1980s, the Texas economy and the Texas budget were both in a mess. The price of oil plummeted, the real estate market crashed, banks and savings and loans failed and legislators increased taxes and cut services. That was a crisis.
With that economic collapse fresh in their minds, voters adopted a constitutional amendment in November 1988 that created the Economic Stabilization Fund, commonly referred to as the Rainy Day Fund. Right now there is only $191.6 million in the Rainy Day Fund. That is enough money to run state government – pay teachers, keep the prisons manned, build roads, care for the poor and provide all other state services – for less than 24 hours.
Today there are those who want to dip into the Rainy Day Fund. I say no. The state is not facing a crisis that warrants tapping into this fund. In fact, I believe now is the time to be steadily replenishing the fund, not raiding it.
I am asking the Legislature to let the people vote on a constitutional amendment that would transfer to the Rainy Day Fund 75 percent of the interest earned on the General Revenue Fund and investment income in excess of the amount estimated by the Comptroller in the Biennial Revenue Estimate.
Over the course of the last five years, if my plan had been in effect, $196.4 million additional dollars would have been transferred into the fund. Like any good savings plan, it’s a steady, disciplined way to put additional money away when times are good to be used when times are tough.
There are currently four sources of money for the Rainy Day Fund: the oil production tax, the natural gas severance tax, the unencumbered General Revenue Fund balance and legislative appropriations. To date, there have been seven natural gas severance tax transfers, one oil production tax transfer, one unencumbered balance transfer and the Legislature has never appropriated money to the Rainy Day Fund.
These limited funding sources, combined with the Legislature twice appropriating money from the fund, have made the Texas Rainy Day Fund balance as a percentage of general appropriations dead last among the 42 states that have balances in their Rainy Day Funds.
CAROLE KEETON RYLANDER