Texas public policy foundation
Rainy Day Fund Battle Heats Up
 
 

During the 83rd Texas Legislative session, lawmakers approved a constitutional amendment to authorize the expenditure of $2 billion from the state's Economic Stabilization Fund, or rainy day fund, on water infrastructure projects. The cost of meeting long-term state water needs is estimated to be $53 billion, $27 billion of which are state financial assistance. Moreover, the cost of inaction is estimated to be "$116 billion in lost income by the year 2060." The measure, which is presently awaiting voter ratification in November 2013, has been consistently challenged by conservatives.


Conservative opposition to the financing is forming along lines similar to that contingent which lobbied against the bill in the legislature. Groups resistant to the measure include Grassroots America, Texans for Fiscal Responsibility, Empower Texans, and the North Texans Citizens Lobby. These challengers have argued that traditional state coffers are sufficiently flush with new revenues that the rainy day funds ought to remain in the savings account. The Foundation rejects the use of this capital because the significant increase in session-to-session spending for the 83rd legislative session illustrates the existence of ample funding to support water infrastructure. In this way, the state ought to better prioritize its use of discretionary capital rather than merely dipping into the state's savings. Moreover, this transfer of funds skirts the totaling of the state's spending cap, which the Legislature has ardently protected.


While the cause is noble, the current funding mechanism for the project is not.

 

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