Tap Texas Rainy Day Fund


Tap the Texas Rainy Day Fund or Cut Spending?


Tap Texas Rainy Day Fund?
Tap Texas Rainy Day Fund?

The looming question for the state of Texas is “should we tap the Rainy Day Fund to close the $4.3 billion budget deficit, cut spending, or both?” During testimony to the House Appropriations Committee, Texas Comptroller Susan Combs said, “I don’t know how you get to $4.3 (billion) with cuts. I really don’t know how you do it.” Republican Chair of the House Appropriations Committee, Jim Pitts of Waxahachie, filed a bill which would take $4.3 billion from the Economic Stabilization Fund (Texas Rainy Day Fund) in order to compensate for the budget shortfall in Texas. Pitts recently said, “The agencies have done their part (to reduce spending). Now it’s our part to do.” However, there are many conservatives who feel that state officials have been disingenuous in their efforts to cut spending. One such conservative is JoAnn Fleming, Executive Director of Grassroots America – We the People from Tyler, TX who developed a 14 point plan to reduce government spending in Texas. Fleming’s compelling argument is as follows.


March 4, 2011

Tough Times Call for Principled, Decisive Leadership:
 The Case to Reduce State Government Spending

JoAnn Fleming, volunteer Executive Director Grassroots America – We the People

Free-spending, big government protecting types call it “root canal politics.” Constitutional Conservatives call it a necessary means for survival. Simply put – we cannot afford the size and scope of government we have today. As never before, we need elected officials with courage – the courage to cut government down to size – the courage to do the right thing now so that future generations will live free.

Conservatives sent a strong message in the November 2nd General Election by electing a Republican “super-majority” to the Texas House, but business-as-usual from both parties is not acceptable in the State Capitol.  It is time for tough, decisive leadership because time is running out on small businesses and families.

Our state legislature must take decisive action to confront the high cost of illegal aliens in terms of both security and financial costs. State officials must reduce the size, scope, and cost of state government to balance the state budget for the 2012-2013 biennium with no tax increases, no unfunded mandates pushed down to the local level, and without raiding the Rainy Day Fund. 

As for the current budget shortfall of approximately $4.3 billion – until the state legislature has exercised every single cost-cutting option available to reduce the shortfall, tapping the Rainy Day Fund is unacceptable.  To date, the legislature has not enacted any spending cuts for the current budget.  Instead, the legislature appears eager to take the easy way out by raiding the People’s Savings Account.   It is time for the Texas Legislature to make immediate cuts to non-essential programs and services before grabbing the Rainy Day Fund umbrella.   
The Case for Cutting SpendingState government spending increased by nearly 300 percent between fiscal years 1990 and 2010, or 139 percent after adjusting for inflation.  (Source:  Legislative Budget Board).  During the same period, the population of Texas grew by only 49 percent.  It is clear that over the last decade state government has grown to unsustainable levels.  Now is the time to do the hard work required to get spending under control.
Fourteen-Point Plan to Cut Spending and Balance the State Budget:  Across-the-board cuts do not get to the root of the over-spending, over-regulating problem.  Cutting 2.5%, 5% or 10% of a department, agency, or program that is outside basic constitutional authority does not go far enough to solve the spending problem.  It is time to get state government spending under control by:

1) focusing on the basic constitutional duties of state government, making those the top budget priorities;
2) employing zero-based budgeting for every agency, department, and program;
3) mandating proof of citizenship or legal residency for all state and local public services and benefits, and for those emergency health care and public education services mandated by the federal government or by court ruling – all service providers should be required by law to check citizenship/legal status (by e-verify or other reliable means), track costs of services rendered to illegal aliens, and report these costs to the State of Texas and to the People;
7) instituting an immediate hiring freeze and review of all state government positions, all personnel policies, and all benefits; review solvency of benefit funding for state employees; end longevity pay for state employees; increase contribution levels for state employees toward their own pension and insurance benefits;
8) cutting pay for state employees, including statewide officials. Top officials should lead by cutting their pay first. (No public employee should make more than the Governor, including school superintendents.)
9) ending the practice of diverting funds from the originally-intended purpose to other uses (for example, the state motor fuels tax of which 47% is diverted to non-transportation fund use);
10) mandating review of all agencies, departments, and programs to match funding with originally-intended mission and to determine whether or not the agency/department/program is producing measurable results; although this is the purpose of the Sunset Commission, the Sunset Commission needs to be revamped with more private citizen representation on the review board;
11) reviewing all state debt for possible savings through debt consolidation, lower interest rates;
12) suspending funding of parks, bike and walking trails, and renovations of historical properties;
13) ending state economic incentives and subsidies (our low taxes, limited regulations, right to work laws, and civil justice system provide plenty of incentives for companies to come to Texas, when compared to other states);
14) reasserting State Sovereignty under the 10th Amendment of the US Constitution. Too much state spending is driven by accepting unconstitutional federal funding with strings, regulation, and mandates.  All federal funds that come with added strings and regulation should be rejected.

This will not be the state’s last difficult budgeting cycle in the near term.  According to Texas Public Policy Foundation, “Medicaid costs before ObamaCare will double every 10 years through the next three decades. ObamaCare adds 3.1 million people to Texas’ Medicaid rolls by 2014, and Texas will need an additional $10 billion in the next budget to meet those costs.”  In addition, rising fuel costs, unrest around the globe, and the uncertainty caused by suffocating federal debt and onerous regulations affirm that it is a wholly reasonable and prudent expectation that the 82nd Texas Legislature would exhaust all fiscally-responsible cost-cutting remedies before ever thinking about raiding the People’s Rainy Day Fund. 


Fleming is joined by a chorus of conservative voices across the state calling for lawmakers to cut spending in order to reduce the deficit and not prolong the problem by tapping into the Economic Stabilization Fund. However, it remains to be seen if legislators will have the political fortitude to make the tough decisions or simply take the easy way out and go about their “business as usual”.

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