Open Letter to the Texas Legislature on Spending and the Rainy Day Fund
An open letter from 14 fiscally conservative groups to Members of the Texas Legislature calling on lawmakers to show spending restraint, to protect the rainy day fund, and to avoid going the road of California.
May 10th, 2013
Honorable Members of the Texas Legislature:
The Lone Star State has become a model of economic growth through careful adherence to thoughtful fiscal discipline. However, there are some trying to push the state in the direction of more government, more spending, and more taxes.
We strongly urge the Legislature not to deviate from what has been a highly successful path.
Put simply: the Legislature should neither exceed the state’s spending limit—by any
amount—nor should dollars be removed from the state’s Economic Stabilization Fund (ESF) to pay for ongoing government expenses or new programs.
California stands as an example for us. In the 1980s, California’s economy was thriving and
tax receipts robust. Over the course of several decades, however, California lawmakers spent everything they had and ran up debt to boot. Today, the lusterless Golden State is no longer thought of as the nation’s economic powerhouse, and its finances are in notoriously poor shape.
Texas must avoid becoming like California.
Ensuring that Texas does not suffer this fate begins with prudent decision-making on the
Economic Stabilization Fund. The ESF was established to address shortfalls in the budget
arising from economic downturns. By allowing that fund to go untapped in recent years and maintaining a high level of liquidity, the state now enjoys the strongest possible bond rating—a tangible benefit to taxpayers.
Drawing out dollars for expenses that could (and should) otherwise be budgeted from
General Revenues not only reduces liquidity and signals irresponsibility, but sets a dangerous precedent.
Similarly, in a time when revenues have increased more than 30 percent, lawmakers voting to exceed the state’s spending limit put the Lone Star State on a collision course with future economic turbulence.
With the current administration in Washington doubling down on high taxes, increased debt, and downgraded credit ratings, it is more important than ever that Texas not downgrade itself.
Conservatives recognize that Texas has set a high standard and must continue to follow a
higher path. Legislators should reject calls to raid the ESF, and stand firm against “busting the cap.”
60 Plus Association
Americans for Prosperity—Texas
Americans for Tax Reform
Council for Citizens Against Government Waste
Grassroots America We the People
Institute for Policy Innovation
National Taxpayers Union
Texas Eagle Forum
Texans for Fiscal Responsibility
Texas Legislature’s TEA Party Caucus Advisory Committee
Texas Public Policy Action
Texas Public Policy Foundation
Young Conservatives of Texas
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