Production of crude oil and natural gas has historically fluc- tuated based on a number of market-driven and geopolitical fac- tors. Because the Texas Legislature collects severance taxes from this volatile production to primarily fund the state’s Economic Stabilization Fund (ESF), broadly considered the state’s “rainy day fund,” the purpose for and use of the ESF must be worthy.

Texas voters approved the ESF with passage of a constitutional amendment in 1988 after an uncertain state revenue period when oil and gas comprised a large share of economic output and was highly volatile in the 1970s and 1980s. The ballot language that Tex- ans approved was “The constitutional amendment establishing an economic stabilization fund in the state treasury to be used to offset unforeseen shortfalls in revenue.” The Texas Constitution requires
a three-fifths vote in each house to close a revenue shortfall and a two-thirds vote in each house to use it for other reasons.