HOUSE APPROPRIATIONS COMMITTEE VOTES ON USING RAINY DAY FUND
On March 15, 2011, Gov. Rick Perry, Speaker Joe Straus and Comptroller Susan Combs announced the decision to address the $4.3 billion deficit existing in the current biennium’s budget. The decision addresses the deficit by implementing $800 million in cuts, using $300 million from increased sales tax collections over the last few months, and using a one-time draw not to exceed $3.2 billion from the state’s Economic Stabilization Fund, more commonly known as the Rainy Day Fund.
“For more than a year, leaders in the Texas House and I have been working with Governor Perry and Lt. Governor Dewhurst to cut state spending by nearly $1.7 billion as our revenue fell during the national recession,” Speaker Straus said. “Now that most agencies have made substantial cuts from their current budgets, using part of the Rainy Day Fund to pay for the rest of our bills – even as we continue to look for more savings – is the conservative and fiscally responsible way to meet our constitutional duty to balance the budget. The Rainy Day Fund was created to help manage just such unexpected declines in state revenue. We will do so while preserving more than $6 billion in the fund to cover unexpected emergencies in the future.”
On the same day that Gov. Perry, Speaker Straus and Comptroller Combs came to an agreement, the House budget-writing committee voted on and approved House Bill (HB) 275 which would enable the use of $3.11 billion from the state’s Rainy Day Fund. The deal to use $3.11 billion out of the state’s Rainy Day Fund is estimated to have freed up about $4.3 billion in additional spending in the state’s next biennium. Of the total, $2 billion is anticipated to be directed to Texas schools through the school finance formulas.
Now that a deal has been struck by members of state leadership and the committee has voted in favor of HB 275, the next stop for the rainy day fund bill is the House floor, where it will require 90 votes to pass the House. The Texas Constitution requires a three-fifths vote by the Texas Legislature to withdraw funds out of the Rainy Day Fund. This higher threshold serves to protect the fund, thereby attempting to limit its use to only those points when the state has exhaust all options. Currently the Rainy Day Fund is approximately $9.4 billion. If the use of the $3.1 billion is approved by both the Texas House and the Texas Senate, over $6 billion would still remain in the fund. However, by resolving this current biennium’s shortfall, Texas leaders can now focus their future efforts on completing the 2012-2013 biennial budget without raising taxes.
It is important as the 82nd Legislative session continues, that you provide public input on all the bills which have gone before the Texas House or the Texas Senate. With that I highly encourage that you start tracking those bills which you are most interested in. If you are interested in following any of those bills, these websites serve as a great resource:
• The Texas Legislature
• The Texas House of Representatives
• The Texas Senate
If you have questions or comments regarding any of the information mentioned in this article or any bills which have been filed, please do not hesitate to call my Capitol or District Office. As always, my offices are available at any time to assist with questions, concerns or comments (Capitol Office, 512-463-0672; District Office, 361-949-4603).