Good morning, 

While the Thanksgiving leftovers are dwindling in the fridge, so too is the state’s rainy day fund.

Here is today's Texas Minute.

– Brandon Waltens 

Monday, November 30, 2020
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• It should come as no surprise that, after the economic shutdowns from the Chinese coronavirus this year, the Legislature is slated to face a dire budget shortfall when they reconvene in January.
   
• In July, Comptroller Glenn Hegar revised his biennial revenue estimate to project lawmakers would face a $4.6 billion budget shortfall when they return to Austin, though he cautioned that prediction comes with “an unprecedented amount of uncertainty.”

• Passing a balanced budget for the biennium is just about the only constitutionally-mandated activity the Texas Legislature is required to perform (although they will also be required to draw legislative districts when new population data from the census comes in. A topic for different Texas Minute perhaps...)
   
• But although the legislature doesn’t meet again until January 12, 2021 for their 140 day session to address a slew of issues, the work on the budget is already beginning behind the scenes.
   
• Today at 2 p.m. the Legislative Budget Board is scheduled to meet. As part of their agenda, they will propose a floor to be set on the amount of money required to be left in the state’s economic stabilization fund.
   
• What does this mean?
  hmm 
  • ​Legislative Budget Board: Created by statute in 1949, the LBB makes recommendations for budget appropriations ahead of each legislativesession; it consists of the lieutenant governor, the speaker of the House, and eight additional members from the House and Senate.
     
  • Economic Stabilization Fund: Often referred to as the Rainy Day Fund, the ESF is largely funded through oil and gas taxes and intended to be tapped only for natural disasters and economic shortfalls.

• Currently, despite lawmakers’ raiding of the fund for ongoing expenses last session, the State of Texas currently  has more than $10 billion saved up in its Rainy Day Fund. The exact numbers are expected to come to light during upcoming meetings of the Legislative Budget Board.
   
• We can begin to glean what plan of attack the Legislature is planning to take to address the shortfall by what happens in today’s meeting of the LBB:
   
  • Will lawmakers decide to raid the rainy day fund to make up for the projected budget shortfall?
  • Will they instead decide to cut spending?
  • Or, will the Legislature decide to raise taxes?
     
• These are questions the Legislature will ultimately have to contend with when they convene in January. But now is the time to begin asking your lawmakers where they stand.

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