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House considers a bigger ask from the Rainy Day Fund

Needs must, as they say.

The proposal from state Rep. John Zerwas, a Richmond Republican and the House’s chief budget writer, would withdraw about $2.4 billion from the Rainy Day Fund as part of a supplemental budget to pay bills coming due for programs like Medicaid, the federal-state insurance program for the poor and disabled, and to pay for repairs to state-run institutions including mental hospitals and the School for the Deaf.

Previously, Zerwas advocated spending about $1.4 billion from the fund, which holds about $10 billion currently. He updated his proposal at Thursday’s meeting of the House Appropriations Committee, saying that without making a “modest withdrawal” from the savings fund, budget writers would be forced to make draconian cuts to public programs.

Entities that face budget cuts absent a cash infusion include the state’s public education system, pensions for retired teachers, and the Texas child welfare and foster care system charged with protecting vulnerable children from abuse and neglect, Zerwas said.

“Some members of our body have said publicly that our situation isn’t really that bad,” he said. “I can’t disagree more with that.”

Most legislative sessions, the Texas Legislature does not fully fund the cost of state programs, so lawmakers must typically pass a supplemental bill to cover the rest. Zerwas’ proposal would net some matching federal dollars, bringing the total value of the bill to $5.2 billion, officials said. About $3 billion would plug funding holes left by lawmakers in 2015, mostly in Medicaid and in a health care program for the state prison system.

The rest would go toward current needs, such as “deferred maintenance” costs at state-run institutions including mental hospitals, many of which are in disrepair.

See here for the background. I approve of Zerwas’ approach and appreciate what he is saying, but I would be remiss if I didn’t point out that a big part of the problem he is trying to solve is self-inflicted. As the story notes, tax cuts passed in the last session, at a time when oil and gas prices were low and the state’s economy wasn’t doing so well, cost $4 billion this biennium, while the referendum to dedicate a portion of sales tax revenue to the state highway fund has taken $5 billion out of the general fund. Zerwas had to file a separate bill to claw some of that money back. These were choices made by the leadership and the Legislature, the former because tax cuts are Republican crack, and the latter because we absolutely, positively refuse to consider raising the gas tax to meet our road needs. Budget gimmicks are just that, and whatever they purport to do, there’s always another gimmick to undo it. As a certain former President once said, reality has a way of asserting itself.

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One Comment

  1. Bill Daniels says:

    Wiping out a quarter of the rainy day fund Texas has taken decades to amass, just to smooth out a budget deficit NOT caused by a disaster like Ike? Um, no, I don’t think that’s being a good fiduciary of taxpayer money. Do that for 4 straight years, and there is no rainy day fund left.

    Oh, and Kuff, it does pain me to say this, but at heart, I agree with you that maybe the gas tax should be raised, at least to offset the rampant inflation that the government says we don’t have. Of course, the ironic thing about that phantom inflation is, a lot of it is caused by government, via higher property taxes and higher health insurance premiums due to ObamaCare.

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