Senate Votes Against Helping Texas Families
Rejects Ellis amendment to use an additional $3 billion from Rainy Day Fund to alleviate cuts
(Austin, Texas)—The Texas Senate today rejected an amendment by Senator Rodney Ellis (D-Houston) to use an additional $3 billion from the Rainy Day Fund to alleviate devastating cuts to vital programs. Ellis urged the House and Senate to reverse course on the budget and fight for Texas families.
Updated sales tax data show that the Texas economy is rebounding strongly, meaning that the models used to project likely revenue available for the 2012-13 and 2014-15 budgets are far too conservative. According to Texas Comptroller of Public Account records, sales tax receipts for April 2011 increased by a strong 11.4 percent over April of 2010, an increase of $1.87 billion. It was the 13th consecutive month state sales tax revenue has increased.
"We're told we can't use the Rainy Day Fund now because we have to plan for a rainier day which is just not coming," said Ellis. "To ignore today's crisis for one that is not coming is blatantly irresponsible and an unnecessary attack on Texas families."
Ellis pointed out that the legislature has voted to use virtually all of the fund four times in the past, including:
- In 1991, the Legislature spent the entire balance on public schools ($28.8 million).
- In 1993, the Legislature spent the entire balance on for criminal justice matters ($197 million).
- In 2003, the Legislature appropriated "almost every penny" of the balance the Comptroller forecast through 2005. In fact, $295 million was taken from the fund to create the Governor's Texas Enterprise Fund.
- In 2005, the Legislature appropriated $1.9 billion from the Rainy Day Fund, using almost every penny of the $2 billion available. Money was taken from the fund to create the Governor's Emerging Technology Fund.
In 2007, Governor Rick Perry even proposed using the balance in the Rainy Day Fund to pay for property tax relief.
"Not one cent of more than $7 billion unspent by this legislature went to additional tax relief. Instead of leaving all that money in a government bank account, I believe we should have invested some of it in the economy through tax cuts." (Source: Office of the Governor Rick Perry, Press Release, June 15, 2007)
"The sad truth is that Texans -- and the Rainy Day Fund -- are being held hostage to politics," said Ellis. "Those who oppose using the rest of the Rainy Day Fund now fail to point out that Texas has spent nearly every penny of the Rainy Day Fund on four occasions. This is an agenda, not sound economics, and Texas families will bear the pain."
Even if the Texas economy does slow in future years, soaring oil and gas prices virtually guarantee the Rainy Day Fund will continue to grow. Even as the Texas economy slumped, the Rainy Day Fund grew by 40 percent, from $6.7 billion in FY 2008 to $9.4 billion in FY 2012.
Rainy Day Fund Balance by FY
(Source: Texas Comptroller of Public Accounts, Annual Cash Reports)
"Those in charge have said with conviction that the Texas economy is recovering and that better days are ahead," said Ellis. "You can't have it both ways and say times are improving, but we have to prepare for the worst. Hoarding billions in our savings account while nursing homes and schools are closed and tens of thousands lose their job is simply unacceptable."