Texas Rainy Day Fund Minimum Balance Remains At $7.5 Billion; Some Call For Tapping the Fund To Rebuild After Harvey — and Repair Oil Boom Roads?

November 30, 2018

 

As the Texas “Rainy Day” Fund grew to a record high of more than $12 billion — including a new contribution from the state comptroller — a state committee freed up funds to be used in the future.

There is talk that some of that money could be used for emergency repairs for Texas roads that are being torn up by greatly increased truck traffic because of the West Texas oil boom.

On Thursday, Comptroller Glenn Hegar‘s office announced the placement of $2.77 billion into the Economic Stabilization Fund (ESF) and into the State Highway Fund, to be split equally at about $1.4 billion each.

Members of the Economic Stabilization Fund Balance Select Committee voted unanimously on Friday to keep the fund’s minimum balance at $7.5 billion, just like they did at the last legislative session.

Although the vote isn’t tied to whether or even how much the legislature might spend from the fund, there are already calls, as usual, for ways to spend a portion of it.

The committee’s intention is to allow the state to use the ESF’s money for riskier investments that pay higher returns — and to allow the comptroller to continue dividing funds between the fund and the road projects fund.

But one question now may be whether that may affect the state’s credit rating.

The comptroller’s office is proposing to use ESF money for increased-return investing; his proposal is here.

Another question is whether legislators might loosen the purse strings a little to allow money from the fund to be used for projects considered an emergency, such as roads that have become dangerous in west and south Texas thanks to the oil boom, when counties and municipalities are finding it very hard to fund repairs on their own.

There are already bills filed to turn a portion of state money over to counties for road repairs; Hillster Republican state Rep. James White‘s bill to give 2% of money collected from oil and natural gas production taxes to counties with damaged roads died last session when disagreeing legislators killed more than 100 bills during a procedural fight.

Back in 2014, lawmakers approved a one-time appropriation of about $225 million for counties to fix damaged local roads, so the precedent is there.

There is also much talk at the Capitol of using the fund to help pay for the economic jolt still felt by communities rebuilding after Hurricane Harvey, along with calls to use the fund to pay for upgrading state education.