The Texas Public Policy Foundation released the paper, Leaky Umbrella: The Need to Reform Texas’ Rainy Day Fund, today that highlights the history, problems, and reforms to Texas’ economic stabilization fund (ESF), also known as the state’s rainy day fund. The Foundation’s Director of the Center for Fiscal Policy Talmadge Heflin and Economist Dr. Vance Ginn issued the following statements:
“The ESF is critical in maintaining a conservative budget, free of massive tax hikes or deep spending cuts in times of depressed revenues,” said Mr. Heflin. “However, it’s equally critical that we limit the scope by which the fund can be tapped for non-emergency reasons to ensure that taxpayer dollars aren’t unnecessarily spent.”
“At a time when legislators are already calling for dipping into the rainy day fund because of a potential tight budget session, the ESF must be reformed to reduce the use of severance tax dollars for purposes other than unforeseen budget shortfalls,” said Dr. Ginn. “This is essential to passing conservative budgets that increase by no more than population growth plus inflation while keeping taxes lower than otherwise to support economic opportunity for Texans.”
To read the full publication, please visit: http://txpo.li/leaky-umbrella
The Honorable Talmadge Heflin is Director of the Center for Fiscal Policy at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin. In the 78th Session, Heflin served as chairman of the House Committee on Appropriations and navigated a $10 billion state budget shortfall through targeted spending cuts that allowed Texans to avoid a tax increase.
Vance Ginn, Ph.D., is an Economist at the Texas Public Policy Foundation, a non-profit, free-market research institute based in Austin.
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The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.