Tuesday, April 26, 2011

Perry: Rainy Day Fund is For Rain (Literally)

In citing his concern today that the Senate Finance Committee included another $3 billion from the Rainy Day Fund to offset some under funded but constitutionally mandated state funding of education and healthcare, Rick Perry, a supposed constitutional expert, in his own mind anyway, said it would be unwise to use money for a "short term need" at a time when "nobody knows what the future is going to be." A future, he intimates, that could include a Category 5 Hurricane hitting Corpus Christi or Houston. That could bankrupt the state he says.


But constitutionally, the Rainy Day Fund can’t be used to handle rainy days. Constitutionally, the Rainy Day Fund can only be used to pay for recurring expenses during bad times. During times when not enough revenue has been raised in order to pay for essential state services.

Here is what it says in the Texas Constitution:
The constitutional amendment establishing an economic stabilization fund in the state treasury to be used to offset unforeseen shortfalls in revenue.

The only problem with this is that some would say that there were no unforeseen shortfalls in revenue. When the revenue structure was established 6 years ago there already were predictions of twenty plus billion dollar shortfalls even back then.

So a shortfall that was entirely intentional, theoretically, cannot qualify to make draws on the Rainy Day Fund.

But no one is admitting to that, are they?

So it’s back to the original premise. Rick Perry is blowing smoke out of the place from which monkeys also fly. The Rainy Day Fund was never meant to take care of disasters; it was intended to take care of budget shortfalls. Like the one that will occur in 2 year’s time.

The Senate Finance Committee is entirely correct to draw another $3 billion from the fund.

They can and should do that. It is actually constitutionally mandated that this be done.

And then they can go back and write in a draw on the Permanent School Fund and wipe out the entire shortfall.

Saving the lives of Texans, and saving the public education system that will otherwise regress to what we had in the Dark Ages, in a feudal society, where only the rich went to school.

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