Water plan still has no funding
Dewhurst’s recommendation fits within Perry’s Texas Budget Compact, a conservative fiscal agenda the governor announced earlier this year.
“An adequate Rainy Day Fund is critical to our ability to respond to and recover from disasters and emergencies, whether they’re natural or man-made,” the compact states.
“When we do pay money out of the fund, it’s important it be used exclusively for one-timeonly needs, and never be tapped simply to meet ongoing expenses.”
The Legislature created the Economic Stabilization Fund in 1987 from oil and gas taxes to deal with swings in the state’s economy due to the unstable price of petroleum products. Lawmakers have drawn from the fund in 12 of the past 22 years.
In 2003, Perry and the Legislature nearly drained the fund when the Texas economy suf- fered and tax revenues plummeted. The fund was last tapped in 2011 when Perry and lawmakers used $3.7 billion to make up a budget deficit, a move required by the Texas Constitution.
But tapping the fund to create an infrastructure development bank is more in keeping with how Republicans want to use the fund in the future. Perry tapped the Rainy Day Fund to create his Texas Enterprise Fund in 2003 and his Emerging Technology Fund in 2005.
Perry uses those funds to persuade companies to open shop in Texas or invest in promising startups already in the state.
A well-designed water infrastructure development bank could become a self-sustaining way for Texas to prevent major water shortages as the state’s population continues to skyrocket.
A water plan approved last year by the Texas Water Development Board said the state should eventually spend $53 billion over the next half-century on new reservoirs, dams, pipelines and wells. So far the Legislature has not set aside a penny to implement the plan.
The bank could become a resource for local governments during the early development of new water resources. Those governments could eventually pay back the bank through their construction budgets, Dewhurst
The bank could become a resource for local governments during the early development of new water resources.
Texas is also facing a transportation crisis after years of shrinking income from fuel taxes and $17 billion in borrowing for road building. Rather than raise fuel taxes, the Republicancontrolled Legislature has been allowing the Texas Department of Transportation to cover its budget with voter-approved bond money, an approach that will end next year when the last of that money runs out.
Finally, there is another good reason to tap the fund: It could max out. The Texas Constitution limits the fund to 10 percent of general revenue collections and the present limit is $12.1 billion. Once the fund reaches its limit, those oil and gas revenues start going into the state’s normal coffers.
Tapping the fund for a special purpose gives the state’s leadership greater control over how the money will be spent.