When is Texas going to dip into the billions in its rainy day fund to fix some problems?


Every time I call Kevin Lyons, the spokesperson for the Texas Comptroller, I shout the famous line from the Jerry Maguire movie into the phone.

“Show me the money!”

It’s an inside joke. About 20 years ago, we both satirized the Jerry Maguire movie to raise money for the United Way.

Kevin played the athlete, character Cuba Gooding Jr. I played his sports agent, character Tom Cruise. (Hey, it might be text, but I can still hear you laughing at me.)

In our video, as in the film, we shouted the slogan to each other.

I called Kevin last week and, of course, I yelled, “Show me the money!”

And this time, he did it in record fashion.

His boss, Glenn Hegar, the state comptroller, has released new numbers, and they’re jaw-dropping.

If we are, in fact, in a national recession, someone forgot to say it in Texas.

Kevin told me the projected budget surplus for the state was nearly $27 billion. That’s a $15 billion increase since my last audit in April.

Meanwhile, the infamous rainy day fund, officially known as the Economic Stabilization Fund, is expected to reach $13.6 billion, an increase of $1 billion since April.

So by my calculations, state legislators will have something like an extra $40 billion to play with.

Watchdog says it’s our money. Give it back.

Texas Rainy Day Fund

What made me think of that? A reader wrote to me with questions about the rainy day fund.

“Where does it exist? How is it invested? Who follows its evolution? Have withdrawals already been made? If so, for what purpose? Who can approve its use? »

I can also apply the same questions to the separate budget surplus.

The rainy day fund is similar to a hidden savings account in case massive budget cuts hit schools, health care and other public services, according to a story produced several years ago by the Center for Public Policy Priorities, a nonpartisan group called Every Texan.

The fund was established in 1988 and is funded by revenue from oil and gas collection taxes. Hegar supervises him. Legislators can distribute the funds, but usually only when they are in session.

The fund has been called upon several times during its existence. It’s not easy to get there. In some cases, a three-fifths supermajority vote of state lawmakers is required to distribute the money. For others, a two-thirds vote is required. This makes it harder for lawmakers to get their hands on it.

Hegar is also authorized to make temporary transfers. Some were made for water supply projects, disaster relief, public education, economic development, and health and social services, according to a comptroller’s report.

After being elected in 2014, Hegar was upset that the rainy day fund was not invested enough to keep up with inflation. In a famous line, Hegar said, “It was like burying the money in a hole on the Capitol lawn.”

Texas budget surplus

With all the negative economic talk about a possible recession, the state budget surplus still jumped from $15 billion in November to $27 billion this month. It’s quite amazing.

In his surplus update, Hegar, who is up for re-election this year, said some categories of tax collection are breaking records. Taxes on oil and natural gas production have broken records.

Maybe all is not well.

Hegar said, “It’s important to realize that inflation is a major factor in why we’ve had record tax revenue in sales tax and other revenue over the past year.”

For additional coverage, Hegar told legislative leaders this month in a letter that his revised estimate was “subject to substantial uncertainty.”

A quick analysis of the news shows that other states are also enjoying record budget surpluses. Some attribute a flow of federal dollars. For us, high energy prices, which hurt both gas pumps and household and business electricity bills, also result in significant sales taxes.

The high cost of vehicles means more sales taxes on auto sales. The same goes for in-store purchases. If you pay double for an in-store item that previously cost much less, the sales tax will also double.

What to do with the money?

Lieutenant Governor Dan Patrick, who is up for re-election this year, released this statement when the revised surplus numbers came out: “Every member of the Texas Senate will have ideas about how this extra revenue should be spent and I will give them all the necessary attention. However, I believe, first and foremost, that any surplus should first go to the taxpayers of Texas. Texas homeowners should get tax relief before committing to new expenses.

I agree.

If some of the surplus goes back to homeowners as tax relief, that takes some of the heat off of cities, schools, and counties. These local governments are under pressure from voters to reduce tax rates to compensate for rising property assessments. With state tax relief, consumers would get tax relief and local governments would not have to impose drastic budget cuts.

It’s almost certain that even though Texas has nearly $40 billion between these two funds, nothing will be touched until the next Texas legislature, elected in November, takes office in January.

As for that new $200 million tax that Texas phone users will pay starting in October (I first reported this last week), consumers should no longer be paying that bill. Let the state pay.

More importantly, the billions of dollars in bonds the state is borrowing to pay for corporate losses suffered by the February 2021 freeze can also be sold. Otherwise, we will be paying freeze-related electricity taxes for perhaps two decades or more. Let the surplus pay those bills.

We taxpayers, electricity and telephone users, and many other advocates of important causes, now have a chance to create a different kind of story with this unexpected money.

As Jerry Maguire said when he started his own business, “If anyone else wants to come with me, this moment will be the ground floor of something real and fun and inspiring… and we will do it together!”

Show me the money!

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Read his winning columns:

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