Senate GOP Calls for $6B Take From Rainy Day Fund

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The politically forbidden piggybank of the Texas Legislature may soon be cracked wide open. And surprisingly, Republicans are holding the hammer.

Abandoning resistance to seek financial solace in the state Rainy Day Fund, Senate Republicans unveiled a plan Thursday to spend $6 billion for water and road projects, which have taken on new urgency during this 140-day session that is nearing a final sprint.

The unexpected GOP proposal would use roughly half of a projected $12 billion socked away in the growing reserve fund, which Gov. Rick Perry and other top Republicans have fiercely safeguarded in recent years, even as the balance soared and state budgets were slashed.

And before the Legislature adjourns in May, Republican budget-writers in the Senate say they could dig even deeper into the fund to help cushion school districts waylaid by historic cuts in 2011.

"The answer is yes, I'd be willing to consider that," said Republican state Sen. Tommy Williams, chairman of the Senate Finance Committee and author of the proposal that unanimously cleared a committee vote Thursday.

One Republican on the panel said he wouldn't ultimately support the bill because of debt concerns. Perry did not personally comment publicly Thursday, but an aide reiterated Perry's stance that the fund remains well-stocked.

When the session began in January, Perry did throw support behind using the Rainy Day Fund for water and transportation projects, but he called for taking just $3.7 billion.

"He has always said it's important to maintain a strong Rainy Day Fund in case of natural disaster and to maintain our state's strong debt rating," Perry spokeswoman Lucy Nashed said Thursday.

Perry is often ideologically aligned with the conservative Texas Public Policy Foundation, or TPPF, which panned the proposed draw-down.

Under Williams' proposal, Texas residents would vote in November on two constitutional amendments: One would take $2.5 billion from the Rainy Day Fund for water projects, and the other would take $3.5 billion to repair and expand crumbling and congested highways.

Talmadge Heflin, director of the Center for Fiscal Policy at the TPPF, said elected lawmakers should not "abdicate their responsibility" by leaving the decision to voters.

Water supply has become a top priority of lawmakers following a historic Texas drought. Momentum to put more money toward transportation projects, on the other hand, has struggled to gain traction. State transportation officials say they need an extra $4 billion annually to keep up with maintenance and a booming Texas population.

The proposed $6 billion is by far the most money the Legislature has suggested taking from the fund, which is where excess oil and gas tax receipts go. A resurgent Texas economy driven by a booming energy industry has left the fund particularly flush.

Perry and fiscally conservative Republicans have argued that the fund was created for one-time expenses and natural disasters, and not recurring costs such as school funding. Calls to restore money to school districts by tapping the fund have persisted this session, and continued after Williams laid out his bill for the first time.

Democratic Sen. Royce West came ready with an amendment to take $2.4 billion from the fund for schools. Others expressed optimism that the Rainy Day Fund could now be tapped for education, too.

"Long overdue is that we quit getting in these either-or situations," Democratic Sen. John Whitmire said. "It shouldn't put the need for water and highways against public education. We're not a poor state by any means."

Republican Sen. Kevin Eltife, who has challenged his party on its blanket opposition to tax increases, said he would not support the bill in the full chamber. He said more revenue is the only way to cure the state's continually underfunded and under-built transportation system.

"Taxes. I know everybody is going to have a heart attack when I say the word," Eltife said. "We have to have new money ... or we're never going to solve this problem. Continuing to borrow money will not solve it. It's real easy for politicians to borrow cheap money to solve problems."