Texas leaders agree to tap into Rainy Day Fund
AUSTIN, TX
Shortly after Perry and House Speaker Joe Strauss announced they
had reached an agreement to tap $3.2 billion of the state's Rainy
Day Fund to help close a projected $4.3 billion deficit, the House
Appropriations Committee voted unanimously to back the measure. The
vote sends the measure to the full House where, as in the Senate,
it would need the approval of three-fifths of voting lawmakers
before becoming law.
While Perry agreed to use the Rainy Day Fund to address the 2011
deficit, he vowed not to agree to use it to address the massive
revenue shortfall that remains as lawmakers tackle the budget for
2012-2013.
"We have worked closely with state leaders and lawmakers to
balance the current budget, which includes using a one-time amount
from the Economic Stabilization Fund to help our budget deal with
the impact of the national recession," Perry said. "I remain
steadfastly committed to protecting the remaining balance of the
Rainy Day Fund, and will not sign a 2012-2013 state budget that
uses the Rainy Day Fund."
The state is facing a revenue shortfall that could reach as high
as $27 billion over the next two-year budget when counting
population growth and cost increases. The next budget likely will
include severe cuts to all areas of state government, most heavily
to public education and low-income and elderly health care
programs.
Democratic Rep. Sylvester Turner, of Houston, cautioned that
people should not think schools, nursing homes and Medicaid
providers will be spared from budget cuts because of Tuesday's
agreement.
"For the teachers that came to this Capitol on Saturday and
yesterday, to all the medical providers walking the halls, all the
children concerned about their needs, nothing is going to be used
from the Rainy Day Fund to cover any of their needs for the next
two years," Turner said.
The Rainy Day Fund, which is expected to have a balance of $9.4
billion at the end of the next budget period, is made up of revenue
from oil and gas taxes.
The measure approved by the House Appropriations Committee on
Tuesday also would make $800 million in agency cuts in the current
budget, which covers state spending through Aug. 31.
House Speaker Joe Straus said the agreement allows the state to
preserve about $6 billion of the reserve fund to cover future
emergencies.
"Today Republican leaders locked in a plan to force up local
taxes, make college more expensive, crowd more kids into
classrooms, fire teachers, close nursing homes, and cut basic
health services for children and the disabled," said Rep. Mike
Villarreal, a Democrat from San Antonio, who is on the House
Appropriations Committee. "Texans have already paid taxes into the
Rainy Day Fund, but the governor would rather sit on the people's
money than use it to save our schools."
Conservatives have argued the Rainy Day Fund should be
preserved.
"We can reasonably predict that economic pressures on the Texas
state budget will be even more severe in the next legislative
session," said Talmadge Heflin, director of the conservative Texas
Public Policy Foundation's Center for Fiscal Policy.
"It is the duty of those elected to government to govern -- and
it is the duty of those who elected them to hold them accountable.
Now more than ever, Texans must demand that their Legislature craft
a responsible, conservative state budget with no further use of the
Rainy Day Fund," Heflin said.