Incoming State Senator Charles Perry (R-Lubbock) has filed a constitutional amendment to protect the Economic Stabilization Fund (ESF), sometimes referred to as the “rainy day fund”, by requiring a minimum balance.
If passed, SJR 19 would require that the fund maintain a minimum balance of 5% of General Revenue. It would require a 4/5 vote of both chambers for any appropriations from the ESF that would cause the balance to fall below that threshold. Current state law provides no legal floor to the fund, allowing the legislature to grab any monies contained within by a simple 2/3 vote.
In the last legislative session, then State Rep. Perry filed a similar bill, which was covered by Empower Texans / Texans for Fiscal Responsibility. However, that bill was killed in committee by Straus ally and House Appropriations Committee Chair Jim Pitts. Pitts won’t be an obstacle this time though. He “retired” following an unsuccessful attempt to impeach UT Regent Wallace Hall after Hall uncovered a scheme involving Pitts and fellow legislators using their clout to get under-qualified students (including Pitts’ son) into the university.
Last month, a joint committee tasked with studying the fund said the state should hold 7.5 percent of general revenue in the ESF in order to maintain the state’s AAA credit rating — a sentiment echoed by outgoing Governor Rick Perry.
With a 2.5% difference between those statements and his legislation, State Sen. Perry made it clear that his amendment did not intend to encourage a spending spree down to the minimum.
“I am proud of our budget writers for prioritizing the Rainy Day Fund and setting a floor of $7 billion,” said Perry. “My legislation simply puts in place a floor to ensure that in the future we do not get overzealous in spending from our savings account.”
This bill rounds out a series of fiscal responsibility bills already filed by Perry including limits to the maximum rate of appropriations, zero based budgeting, and repealing the franchise tax.