Is it raining yet?

Like most of us, all of us have a savings account. You may call yours an emergency fund or a bond portfolio. The State of Texas calls its the Economic Stabilization Fund.

Founded in 1987 for surplus oil and gas taxes, Texas’ “Rainy Day Fund,” as it is commonly known, has nearly $10 billion in it. State lawmakers are currently deciding whether to spend it. They are determining whether the weather is rainy.

Predicting the weather is not unlike legislating. Both meteorologists and politicians are mistake-prone. Both inspire unintended consequences.

The weatherman says cloudy with a high of 50 and I wear a sweater. Soon, I’m sweating under 70 degree blue skies. Likewise, politicians make housing more accessible for people with credit blemishes and soon our economy melts down to the brink.

Texas’ economic weather lady, Comptroller Susan Combs, has given her prediction of how much revenue the state will collect in the next two years. Her estimate is $27 billion less than what “experts” say we need to continue existing state services at their current levels.

The $27 billion figure is on top of $4 billion needed to fill a gap in the current budget that ends August 31.

What’s a legislature to do? Raise taxes? Cut spending? Expand revenue sources (e.g., gambling)? Or dip into the state savings account?

A November 2010 wave sent 100 Republicans to the 150-member Texas House. Their mandate: Live within your means. But in March, the voices of those dependent on state funding easily drown out October’s austerity applause lines.

At this point, it doesn’t hurt to remember that we would be $6 billion less in the red now if we hadn’t spent Washington’s stimulus dollars two years ago. It also doesn’t hurt to remember that the state budget has grown by 65% in the last 10 years, from $114 billion to $188 billion.

It also may be helpful to recall that only within the last 60 years has the state provided any health services.

Public education services are mandated by the Texas Constitution, not health services. Yet, health and human services spending comprises ⅓ of Texas’ total budget or a full $30 billion a year.

A vicious cycle occurs by default: Economy grows. Revenues rise. Government spends. Economy falters. Revenues fall. Government taxes more to stay even. Government spends. Repeat.

Programs are easily added. They are hardly axed.

So, is it raining in Texas? If it is, it’s just a drizzle, not a hurricane, a massive terrorist attack, a statewide disease outbreak or 25% unemployment.

Let’s not just leave the Rainy Day Fund alone, let’s endow it and add to it. Any financial planner will tell you: capital gains are the secret to long lasting economic stability.

Temporary hardships don’t last forever. And we Texans of all people should know just how quickly the weather can change.

1 Response to “Is it raining yet?”

  1. 1 G> S> Chaffin March 16, 2011 at 16:48

    There is no doubt in my mind that our freedom loving people are heavily influenced by faulty perceptions of economic influence. It is unfortunate when the glib politicians knowingly mislead their constituency with impossible promises. One of the most effective methods for combatting this dangerous weakness will continue to be by informing through the internet. GSC

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