The Rainy Day Fund
During the 2011 Legislature, you may have heard people talking about whether to use the “Rainy Day Fund.” But what is it?
The Rainy Day Fund, formally known as the Economic Stabilization Fund, is the state’s savings account. The money comes from excess oil and gas production taxes and some unspent general revenue. It is intended to provide a cushion for unexpected budget shortfalls, but requires a two-thirds majority vote of the legislature to use it.
During the 2011 legislative session, public education supporters asked state leaders to use a portion of the Rainy Day fund to soften some of the most severe cuts to Texas schools and students. Unfortunately, elected officials were unwilling budge, choosing to let Texas students bear the brunt of funding cuts instead.
The state comptroller has already said that another huge budget shortfall is expected in 2013 and that lawmakers will likely have to tap at least some of $7.3 billion currently in the Rainy Day Fund. But much of that money may be needed to make up gaps in Medicaid coverage, which lawmakers knowingly underfunded by an estimated $4.8 billion last time around.
The Rainy Day Fund should remain an option for education funding, but it is not a permanent solution. Our elected leaders must find the courage to fix the core problems in our school finance system and our tax structure to ensure strong educational opportunities for all Texas students.