“This afternoon, an amendment was added to Senate Bill 2 that would automatically redirect any rainy day fund balancein excess of $6.5 billion at the end of the next biennium into more school spending. Please ask your members or readers to contact their state representatives ASAP (the House is in session tonight) and encourage them to remove this provision when SB 2 comes back on third reading tomorrow.”
From Talmadge Heflin, Director of TPPF’s Center for Fiscal Policy
Senate Bill 2 includes amendment that could divert billions from rainy day fund
An amendment offered to Senate Bill 2 – and adopted on a non-record vote – would require that any rainy day fund balance projected in excess of $6.5 billion at the end of the 2012-13 biennium be directed immediately into the Foundation School Program. If passed, this amendment could siphon as much as $2 billion away from the rainy day fund over the next two years, according to preliminary estimates.
The Texas House and Senate accomplished a historic feat at the end of the regular session mere days ago, when they passed a budget that was an all-funds cut from the preceding biennium, did not raise taxes, and did not squander a penny of the rainy day fund. This amendment would threaten that tremendous accomplishment and undo one of the most important outcomes of the regular session of the 82nd Texas Legislature.
Voters conveyed a clear message last November that they wanted to see the state’s budget shortfall addressed by pruning the overgrowth in spending. With this amendment, the Texas House would respond that it views the budget shortfall as a mere math problem.
School spending has grown far faster than enrollment growth or inflation, in part due to poor decisions by local school districts. Two years ago, the Legislature propped up the school districts with $2.3 billion in federal stimulus funds, with the understanding that these one-time funds would not be replaced. School districts need to be challenged to become more efficient and prudent in how they spend taxpayer dollars, and the time for them to bite the bullet has come.
I encourage Members to remove this provision when Senate Bill 2 comes up on third reading.
Director, Center for Fiscal Policy