No downside to tapping rainy day fund

In Nation
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“It’s insane

It’s in vain

You stay to maintain the pain.”


Texas lawmakers should adopt Texas native Miranda Lambert’s “Maintain the Pain” as their budgetary theme song.

Lambert’s song is about a romantic relationship gone wrong, but the title and emotional thrust are a perfect fit for the Legislature’s stingy approach to budgeting.


Some significant differences can be found between the plans by budget writers. The $217.7 billion proposal approved by the Senate spends a few hundred thousand dollars less than the House version.

The House at least attempts to add $1.5 billion to the state’s inadequate, underfunded school finance system. But House budget writers are playing games with health and human services by crafting cuts in a way that the reported would reduce Medicaid spending by 4 percent.

Another key difference between the budget plans is that the House would spend $2.5 billion from the state’s so-called rainy day fund and the Senate would resort to an accounting measure that delays $2.5 billion in highway spending.

Members of the House and Senate have exchanged some choice comments about the approach adopted on the other side of the Capitol, but both budget plans fail to adequately fund public education and social safety needs.

A slowdown in the state’s oil and gas industry has led to a reduction in available revenue this year, making the always painful process even more bruising.

The House is on the right track with its proposal to use the . The Senate budget doesn’t make that move, but the recently reported that talk has emerged in the Senate about tapping the rainy day fund for certain one-time expenses.

The fund is expected to reach about $12 billion in the next biennium if lawmakers don’t use any cash from the giant savings account, which is filled by a portion of the state’s oil and gas severance tax revenues.

In a recent commentary published by the Express-News, House Speaker noted that the fund has been used seven times since its creation in 1987.

But some lawmakers aren’t willing to use it now. That position is misguided since taking a big chunk of the fund has no real downside.

The legitimate reason for maintaining a sizable balance is to preserve the state’s credit rating for bonds backed by Texas.

In his Express-News comment, Straus wrote, “Ratings agencies say we could maintain the state’s strong credit rating with as little as $5 billion in the fund. Nobody in the Legislature is talking about reducing the balance of the fund to such a low level.”

A analysis notes that the Legislature has set a minimum $7.5 billion balance in the fund to protect the state’s credit rating. Even though that amount is higher than necessary, lawmakers aren’t willing to get close to the official minimum sufficient balance.

Why not use $4.5 billion in the next two-year budget cycle, a move that would leave a healthy $7.5 billion in the rainy day fund? That money would do a lot of good for Texas students, sick Texans, abused children and so on. Those needs have been underfunded even in years when state coffers were flush.

Critics call for caution, saying that the savings account shouldn’t be used for ongoing expenses. This concern could be mitigated if lawmakers would stop cutting taxes.

Still, the oil and gas industry will not stay slow forever, and investments in the state’s education and health care systems would lead to a long-term economic boost.

Why not help Texans when it is possible and protect crucial programs until cuts are really necessary?

Lawmakers prefer to maintain the pain as they bolster their conservative credentials. It is a shortsighted approach to building and nurturing the vibrant Texas that we all say we want.

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