House Budget-Writers Vote to Use Part of Rainy Day Fund; Governor Says the Rest is Off the Table, Fiddling While Rome Burns; Senators Keep Looking for More Revenue

House Budget-Writers Vote to Use Part of Rainy Day Fund; Governor Says the Rest is Off the Table, Fiddling While Rome Burns; Senators Keep Looking for More Revenue

Today the Texas House Appropriations Committee made a small step toward common sense on the state budget, voting unanimously to spend $3.2 billion of the state’s Economic Stabilization Fund to cover a portion of the state’s huge revenue shortfall. The committee did so as Gov. Rick Perry, House Speaker Joe Straus, and state Comptroller Susan Combs issued a joint statement backing the move as a necessary one “to help our budget deal with the impact of the national recession” on state revenue for the current 2011 fiscal year.
However, Gov. Perry, having erased his original line in the sand against any use at all of this so-called Rainy Day Fund this session, immediately drew a new one concerning any further use of the fund, for the next two-year budget period. Said he: “I remain steadfastly committed to protecting the remaining balance of the Rainy Day Fund, and will not sign a 2012-2013 state budget that uses the Rainy Day Fund.”  The governor added that more than $6 billion remaining in the fund must not be used to address the current budget emergency but must be reserved instead “to cover unexpected emergencies in the future.” Speaker Straus also spoke of the need to “preserve” the fund.
But the limited use of the Rainy Day Fund these leaders endorsed today still leaves the state deep in a yawning hole for the coming 2012-2013 biennium—more than $23 billion in the hole, by generally accepted estimates. That reality prompted a sharp response to the governor from a leading advocate for a more balanced approach to balancing the state budget. Said Scott McCown, director of the Center for Public Policy Priorities:  “Governor Perry has things backwards. Texans aren’t supposed to protect the Rainy Day Fund. The Rainy Day Fund is supposed to protect Texans. Voters created the Rainy Day Fund by constitutional amendment in 1988 to offset unforeseen falls in state revenue just like the state faces in 2012-13. The Legislature and Governor should use the Rainy Day Fund to bridge the revenue hole created by the Great Recession.”