Texas Rainy Day Fund: Paying it – and Saving it – Forward
AUSTIN, September 20, 2016 – In 1988, in the wake of a recession caused by slumping energy prices, the Texas Legislature created the Economic Stabilization Fund (ESF) as a cushion for state budget writers to fall back on in lean times.
The ESF – commonly called the “Rainy Day Fund” – has grown from less than $20 million to $9.7 billion at the end of fiscal 2016. Deriving most of its revenues from the state’s oil and gas production taxes, Texas’ rainy day fund is the largest of its kind in the nation.
In the latest issue of Fiscal Notes, the Comptroller’s office examines the rainy day fund and how it’s been used over the years.
“Sound fiscal management, conservative budgeting and responsible stewardship of the rainy day fund have allowed Texas to weather previous budgetary challenges, address pressing infrastructure needs and avoid short-term borrowing to close cash flow gaps,” Texas Comptroller Glenn Hegar said. “While our state faces a more challenging fiscal climate than in recent biennia, our rainy day fund remains an essential and robust backstop to help Texas through times of economic adversity.”