A provincial piggy bank has been filled to the brim thanks to fees on the oil and gas industry, and Democratic candidates are lining up to knock it open.
The Texas Comptroller of Public Accounts administers the Economic Stabilization Fund ( ESF), also known as the Rainy Day Fund. The balance, according to the treasurer, will reach$ 27.4 billion by the end of the fiscal season, surpassing its constitutional cover for the first time in history.
Political candidates nationwide see ability in that money.
Governor candidate for this year’s Democratic Party, state representative Gina Hinojosa (D-Austin ) wants to spend almost two-thirds of the bank on direct payments to Texasi families. State Senator Sarah Eckhardt (D-Austin ), the Democratic nominee for comptroller, suggested using the money to pay off the district’s public school debt. State Representative Vikki Goodwin (D-Austin ), who is running for lieutenant governor, suggested a new state health insurance system.
Former state senator and Republican candidate for the position in the November election, newly appointed Comptroller Don Huffines hasn’t made any comments on the proposals.
Here is a description of the Rainy Day Fund and the prospects ‘ ideas for what to do with it.
Past and Rules
The ESF was established in 1988 as a result of a constitutional amendment, and it mostly receives funding from oil and gas compensation fees.
The Texas Legislature has the power to devote the ESF, but only through a supermajority voting. The Legislature can close the gap with three-fifths ‘ consent from both chambers if the state is facing a projected profit gap or budget deficit. The ballot must pass a higher two-thirds threshold in order to be used for any other reason.
Only once, in 2011, has the Legislature used the ESF to make up for a budget deficit. According to information provided by the Legislative Budget Board ( LBB ), it is the largest expenditure from the ESF to date and worth$ 3.2 billion.
The majority of ESF expenses went toward learning. The Texas Education Agency has received approximately$ 4.6 billion from the ESF over the years. In 2013, the company’s three largest ESF spending were$ 1.8 billion for the Foundation School Program in 2013, and$ 636 million for the Foundation School Program to make up for the 2020 home value losses caused by Hurricane Harvey, and$ 60 million for the Foundation School Program and books in 2005.
According to LBB data, the position even bailed out the Teacher Retirement System with$ 589 million in ESF expenditures in 2019,$ 263 million in 2020, and$ 261 million in 2021.
The Legislature has since used the ESF for a variety of purposes, but last year’s Fiscal Year ( FY ) 2021 saw the last ESF expenditure exceeding$ 1 billion.
Since FY 2023, which started in September 2022, the state has experienced a rapid increase in oil and gas tax revenues. The ESF’s communicate of oil-related transfers increased from$ 1.1 billion in FY 2022 to$ 2.2 billion in FY 2023. Since then, oil-related receipts have remained at comparable rates, with$ 1.9 billion in planned payments related to oil production for the current fiscal year.
Texas law places a cap on efforts to the ESF based on the state budget nevertheless. Contributions to the ESF may exceed 10 % of the total revenue that was deposited into the public revenue account during the preceding biennium.
This time, the Rainy Day Fund is expected to surpass that amount for the first time previously, at$ 26 billion.
New Discussions
What counts as a cloudy day is the main topic of discussion over the Rainy Day Fund.
Texas Democrats pressed Governor during the federal government shutdown next fall. Greg Abbott to consider a crisis and use the ESF to keep the national Supplemental Nutrition Assistance Program running.
Some Republicans have suggested using the Rainy Day Fund to lower state property taxes, including state representative Brian Harrison (R-Waxahachie ).
Abbott has previously supported plans to use condition surplus money to buy down or reduce local property taxes in some way. His 2026 platform calls for the elimination of school property taxes, but it doesn’t explain whether the state had cut funding for school districts to make up for it.
In response to numerous requests to expend the ESF, Lt. Gov. The surplus cash has been defended by Dan Patrick as evidence of liberal budgeting. ” Removing the Cap on the Rainy Day Fund to Secure Texas ‘ Long-Term Financial Future” was one of Patrick’s failed priorities for the 89th Legislative Session in 2025.
$ 1,500 checks sent to each family
The Rainy Day Fund would provide each Texas house with$ 1, 500, according to legislation introduced by Hinojosa. The rewards, which Hinojosa’s plan called” Corruption Tax Refund Checks,” would total cost$ 17 billion, leaving about$ 10 billion in the bank.
Paydowns of common college debt
Eckhardt suggested using the money to pay off all state-revenued independent school districts that are experiencing shortfalls.
Eckhardt claims that that leaves$ 24 billion in the account.
Express heath insurance
Last year, Goodwin unveiled a plan for a condition health coverage program that had first concentrate on the Rainy Day Fund.
The Texas Cares program, titled Texas Cares, may provide three coverage choices: Lone Star Basic, Lone Star Preferred, and expanded Medicaid. The first two would be accessible to all Texans who are below a certain income level, and the next may be applicable to all Texans.
Under Goodwin’s program, Lone Star Preferred may begin with a one-time donation from the Rainy Day Fund and new revenue generated by a legal cannabis income. After the Rainy Day Fund transaction is exhausted, the system would continue under the guidance of the members ‘ rates and the cannabis income.
