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There’s still no such thing as a rainy day

Having been in denial about the size of the budget deficit, Governor Perry goes into denial about how to deal with it.

Gov. Rick Perry on Monday said he was opposed to using the state’s rainy day fund to help pay for services despite a looming budget shortfall that is estimated at $15 billion to $27 billion during the next two years.

“We will prioritize what’s important in this state. We will fund those. And we will craft a budget that meets those revenue projections and not raise taxes nor get into the rainy day fund,” Perry said. “And that’s been a consistent message for at least a year and a half.”

He disputed the idea of a shortfall when the next budget has yet to be written, noting that Texas’ budget must balance: “We don’t have shortfalls in Texas. … You couldn’t spend enough to make some of those groups happy.”

Let me ask again, what is the purpose of the Rainy Day Fund if it never gets used? There’s an old parable about a miser who buried all of his money in a box in his back yard. Every day he’d go dig it up and look at it and celebrate how much it was, then he’d bury it again. One day, someone snuck into his yard, dug up the box of money, and stole it. The miser bemoaned the loss of his fortune to a friend, who told him to bury a rock in its place, since it would do as much good for him as the buried money had done.

The point I’m making is that if we don’t use the Rainy Day Fund, it’s basically the same as not having it in the first place. Remember back when we had a federal budget surplus? The conservative argument was that surpluses are bad, because it was “the people’s money” and should be given back, via tax cuts. I find it strange to see Perry arguing that the state should hold on to all of this money. I guess if it can’t be used on tax cuts it’s not of interest to him.

The good news, if you can call it that, is that Perry’s position so far seems to be not in step with the rest of the leadership.

House Appropriations Committee Chairman Jim Pitts, R-Waxahachie, said a shortfall figure of at least $27 billion is “in the ballpark” when looking at the amount of money needed to provide the current level of services.

The initial House budget proposal that Pitts introduces will be written within available money, without using the rainy day fund or other additional revenues. Lawmakers will decide how to proceed from there, he said.

“We cut education. We cut higher ed. We cut public ed. We cut health and human (services)” in the initial proposal, Pitts said. “We’re just showing the reality of it. … There may be a group that thinks this bill is great. I don’t know what to expect this next legislative session.”

[...]

Lt. Gov. David Dewhurst spokesman Mike Walz said that while the fund will not be used in the first Senate version of the budget, Dewhurst “expects both the Senate and the House to dip into the rainy day fund this session in order to fund our priorities and still save a portion to balance the budget again in 2013.”

While I’d want to use the vast majority of the Rainy Day Fund, I’d leave a little bit for the next biennium as well, precisely because I fully expect we’ll be in a deficit situation again, regardless of how the economy does. You could argue that we ought to use it all this session, to show the reality of what our structural-deficit-causing property tax cuts have wrought in 2013, but that may be too scary for some people. While I hope the Lege will avoid disaster on this, it’s important to remember that a minority can prevent the Rainy Day Fund from being used. There’s a lot that can go wrong.

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  1. [...] – Needless to say, Rick Perry didn’t get the memo. [...]

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