AUSTIN — A specially created legislative panel on Wednesday approved a minimum for state savings that is likely to free up hundreds of millions over the next two years to help relieve congestion on Texas highways.
Since voters approved a constitutional amendment two years ago, money in the state's rainy day fund that exceeds what the panel deems a "sufficient balance" is no longer roped off.
The rainy day dollars, almost entirely derived from oil and gas production taxes, can be partially diverted into the state road fund.
That fund has been unable to keep up with Texas' booming population because the state's gasoline tax has been stuck at 20 cents a gallon for a quarter century, with inflation eating at what it actually buys in crushed rock and asphalt.
The rainy day fund — the state's cushion against recessions and unanticipated demands — has a current balance of $10.1 billion, said Chris Bryan, a spokesman for Comptroller Glenn Hegar.
On Wednesday, by an 8-1 vote, the Select Committee to Determine a Sufficient Balance of the Economic Stabilization Fund agreed to set $7.5 billion as the minimum for state savings over the next two-year budget cycle.
"Adopting this floor will allow a major transfer for transportation, paving the way for continued progress on our mobility needs," said Flower Mound Republican Sen. Jane Nelson, a co-chairwoman of the panel.
"It also keeps significant resources in reserves, protecting Texas' credit rating and maximizing our ability to invest funds," said Nelson, the Senate's top budget writer.
Houston GOP Rep. Sarah Davis, the House's co-chairwoman of the panel, noted that under a House-sponsored bill passed last year, the money in excess of the $7.5 billion can be invested in higher-yielding financial securities than most funds kept in the state treasury.
Nor was Wednesday's vote necessarily the final word on how much lawmakers will hold back in the rainy day fund, she said.
"It is important to remember that ... what we are doing today to establish this minimum balance does not preclude a future Legislature from utilizing the rainy day fund below the sufficient balance," she said.
But Houston Democratic Rep. Armando Walle, who cast the only no vote, noted that in recent times, tapping rainy day dollars has been very difficult politically.
As a fracking boom that began in about 2008 swelled the fund's coffers, newly elected tea party adherents and more senior fiscal hawks insisted on hoarding as much of the money as possible. Then voters' bitter complaints about traffic congestion in major Texas cities loosened some of the opposition.
In November 2014, voters approved a constitutional amendment that shoves into the highway fund up to half of energy-production tax money that historically has flowed to the rainy day fund. The trigger to shut off that diversion to roads occurs when rainy-day dollars fall below the "sufficient balance."
Walle noted that, in writing the next two-year budget, it takes a two thirds vote by each chamber to draw down rainy-day money.
That's a high hurdle, he said.
"One of the concerns I have with setting ... a floor is pitting transportation against other needs such as Medicaid [and] funding for CPS," or Child Protective Services, Walle said.
He was referring to Texas' current child-welfare crisis. Caseworkers quit at alarmingly high rates, and thousands of at-risk children are not seen timely, if at all.
"Obviously, it is a priority of this Legislature to increase salaries for these overworked [CPS] workers," he said.
In the current budget cycle, roads didn't get the $1.3 billion a year of oil and natural gas severance tax receipts that was expected.
Last year's transfer was just a bit over $1.1 billion.
Reflecting lower prices for and production of oil and gas, this year's shift was just $440 million, said Phillip Ashley, associate deputy comptroller for fiscal matters.
And it consisted entirely of oil severance tax, he testified. "Natural gas did not exceed the 1987 baseline," meaning there was no transfer of those tax revenues, Ashley said.
He was referring to a 1988 constitutional amendment that created the rainy day fund.
Since voters approved that measure, its biggest money source has been a provision that it capture three-quarters of oil and gas severance tax receipts in excess of the amounts collected in 1987. Since the 2014 amendment, that money is equally divided between the rainy day fund and the road fund, provided there's the legislatively deemed minimum amount of savings.