Atale of two rainy day funds

Norway’ s conservative government has tapped the Scandinavian nation’ s $819billion sovereign wealth fund for thefirst time since its creation20 yearsago, citing lower tax revenues and an economy strugglingwith low oil prices.

Norway started pouring oil revenues into a rainy day fund in 1996 as away to cushion the blow when the nation’ s oil runs out. The account is now the largest sovereign wealth fund in theworld, even after thegovernment pulled$781 million out in January.

Norwegian state secretary Pall Bjør nest ad explained that with oil prices solow, the fund generates more income than the nation’ s oil assets. The fund will continue to grow despite the withdrawal, headded.

Norway is home to 5 million people, which means the government is currently holding $163,800in savings for everyman, woman and child.

Texas also has a rainy day fund financed by oil revenues foreconomic slowdowns, but conservative lawmakers in Austin have started diverting money from it to finance roads and water projects, shifting over $1.3 billion last fall. The latest balance is $9.61billion, or about $355 per Texan.

Lawmakers don’t return to work until January 2017, but when they do, they’ll also find that revenues from oil and gas are down dramatically, andthat sales tax receipts have dropped alongside the drilling rig count. With a budget crisis looming, lawmakers will almost certainly have to tap the fund next year.

This is the key difference between the Norwegian and Tex an rainyday funds. Norway has no limit on it fund, and it didn’ t touch it for 20years. Instead of using it like a savings account, it built a nest egg for its aging population.

Texas lawmakers put a cap on our rainy day fund, with the comptroller required to kick money out if it exceeds 10 percent of the state’s revenues, excluding interest, investment and special fund income. That capi show lawmakers justified using the rainy day fund to finance routine highway expenditures.

Quality roads and cleanwater are critical for the future of business in Texas. Funding these priorities with an unreliable revenue source was political malpractice, and now Texas businesses will suffer as a result.