Texas lawmakers did something right back in the 1980s when they created the state’s Economic Stabilization Fund, also known as the Rainy Day Fund. To ensure that the state would have money to pay ongoing expenses and avoid needless cuts during a temporary drop in state revenue during a recession, they required a portion of the state’s oil and gas tax revenue to be deposited automatically in the Rainy Day Fund. The fund has been used as intended in past recessions. Because the fund fills up again automatically after each use, the legislature now has $9.4 billion in Rainy Day revenue.
Many state legislators are coming to the sensible conclusion that now is the time to use all or most of that money to help deal with the aftermath of the worst recession since the end of World War II. Just today Republican Rep. John Zerwas of Richmond, a leading voice in the House on budget issues, said he would favor using up to $8 billion of that Rainy Day reserve to cover some of the current revenue shortfall. Said Zerwas: “I think my district is reflective of most out there and they think it’s raining and they think this money ought to be used in order to help us deal with the budget challenges that we have, not only for the shortfall we have now but going into the future. If I go home with a budget that has a sharp edge on it like this one does with $5 billion in the bank, I’m going to take a spanking for that.”
While Republican Gov. Rick Perry and some of his Tea Party allies still take a hard line against use of the Rainy Day Fund for ongoing expenses, that is in fact its exact purpose, as many of their fellow Republicans and Democrats alike understand. Thus we’ve heard Republicans like Sen. Kevin Eltife of Tyler say it would be “insane” to leave the Rainy Day Fund untouched in the current budget crisis. In fact, a little bit of daylight has opened up even between Gov. Perry and certain Tea Party spokesmen on the issue. While the latter keep on fulminating against any use of the reserve fund for any purpose short of a natural disaster, the governor recently said simply that it should not be “depleted.”