1. Limit Government Growth and Spending
The Problem: Spending at all levels of government is out of control and continues to increase the size and scope of government, which represents a clear threat to freedom and prosperity for future generations. When government expands, liberty contracts.
Solution: Implement Tax and Expenditure Limits. State and local government spending from ALL sources should increase only by the sum of population growth plus inflation and no more. I will fight for a state constitutional amendment to set this limit in order to protect current and future taxpayers from excessive spending.
2. Protect the Rainy Day Fund – the Economic Stabilization Fund (ESF)
What is the Economic Stabilization Fund (ESF), which is also called the Rainy Day Fund (RDF)? Why is it important? In November 1988, Texas voters approved a state constitutional amendment that created the Economic Stabilization Fund. The explicit purpose of the fund – as stated on the ballot – was to function as a reserve fund to cover unforeseen shortfalls in revenues.
The Rainy Day Fund is generated largely by oil and gas production taxes. Appropriations from the fund to close a budget deficit caused by declining revenues require three-fifths approval by legislators; all other appropriations require a two-thirds majority vote.
The Rainy Day Fund gets most of its funding based on a formula involving the base year of 1987. When the state’s annual oil and gas production tax collections exceed those collected in fiscal 1987, 75 percent of the amount above that 1987 level is transferred into the fund. The Comptroller’s office typically makes these transfers in November of each year.
The Rainy Day Fund also receives half of any “unencumbered” general revenue — that is, unspent and not reserved for a specific purpose — left at the end of each biennium. The fund also retains interest earned on its fund balance.
The 2003 and 2005 Legislatures appropriated ESF funds to purposes including the Teacher Retirement System, state health and human services, the Governor’s Office and the Texas Education Agency. [Source: Comptroller’s Office: http://www.window.state.tx.us/comptrol/fnotes/fn1102/ ]
The Problem: The legislature, the Governor and the Lt. Governor have gotten into a habit of spending out of the Rainy Day Fund instead of doing the hard work of 1) paring down state spending to focus only on the core functions of state government, and 2) eliminating duplicated, overlapping state departments, agencies, and programs.
This session it got far worse. The legislature started this year’s session with $8.8 billion in surplus revenue left over from the current biennium since actual tax collections exceeded Comptroller Combs’ revenue estimates. This $8.8 billion constitutes an unforeseen surplus in revenue – not a shortfall! [Note: This $8.8 billion is over and above the balance in the Rainy Day Fund.]
Yet, by a vote of the 83rd legislature and with Governor Perry’s approval, about half of the $8.1 billion of the Rainy Day Fund is set to be drained from the fund. (Note: $8.1 billion is the projected balance for the end of the budget year Sept. 2013.)
Where is the $4 billion from the Rainy Day Fund going? If voters approve Proposition 6 on the November 2013 ballot, $2 billion will go to a redundant, duplicative water infrastructure plan. Another $2 billion was to be paid out of the fund by August 31, 2013. Approximately $1.75 billion of this $2 billion was to pay for an accounting gimmick from the last legislative session when payments to school districts were postponed in order to balance the state budget on paper. The balance of about $250 million from the ESF went to pay for various programs overseen by the governor – payments that should have been paid out from the $8.8 billion surplus (general revenue) – not from the People’s savings account!
That’s right! When total spending from general revenue and from the Rainy Day Fund are added up, spending increased 24% over the last legislative session! [Sources: Texas Public Policy Foundation, TEA Party Caucus Advisory Committee, and Legislative Budget Board documents]
Solution: Just as any wise business owner or family would do, the state legislature, the governor and the lieutenant governor must stop using the Economic Stabilization Fund like a cookie jar full of cash for extra spending.
If we truly believe in personal responsibility, then the State of Texas should lead and preserve the Rainy Day Fund for economic downturns and for true natural and man-made disasters. We need look no further than the recent example of the devastation wreaked by super storm Sandy. The states of New York and New Jersey immediately turned to the federal government for relief, and many of the people of those states are still waiting for help. The Rainy Day Fund should be preserved so that Texas can be strong and less dependent on the federal government in times of disaster.
Read more at VoteBobHall.com