Committee Sets $7 Billion Floor For Rainy Day Fund
December 11, 2014
The Joint Select Committee to Determine a Sufficient Balance of the Economic Stabilization Fund, co-chaired by Senator Nelson, today approved setting a $7 billion floor for the Economic Stabilization Fund, commonly known as the Rainy Day Fund. This will allow an estimated $1.74 billion to be transferred to the State Highway Fund in Fiscal Year 2015 to benefit transportation projects as directed in Proposition One, which was overwhelmingly approved this fall by Texas voters.
"This transfer will provide a much-needed boost to transportation, which affects everything from commerce and economic development to public safety and our quality of life," said Senator Nelson. "The floor also ensures that Texas has sufficient reserves for any unexpected difficulties in the future. It also allows us to address our vital infrastructure needs in a fiscally responsible way."
Proposition One directs 50 percent of the oil and gas severance tax funds that would otherwise have gone into the Rainy Day Fund after the floor established today is met to go into the State Highway Fund. The floor approved by the committee will apply for the next three fiscal years. The Rainy Day Fund balance is currently $6.7 billion, and it is projected to rise to $8.44 billion in FY15, after the first transfer takes place. If the Rainy Day Fund balance falls below the floor, the funds that are distributed to the State Highway Fund will be reduced or eliminated and the Rainy Day Fund will receive all funds until the floor is reached.