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The Texas state government is using the Rainy Day Fund instead of general revenue to cover expenses such as water and transportation, said State Sen. Brian Birdwell on Tuesday.
Birdwell spoke during a Central Texas Hispanic Chamber of Commerce luncheon on LaSalle Avenue. He said he is concerned with the way the state is handling its budget.
Birdwell said the Texas Legislature has four major areas it addresses when dealing with the budget: education, transportation, Medicaid and water.
“The state budget covered two of those, and when I say the state budget covered it, we have what’s called general revenue that comes into the state of Texas that’s based upon taxes,” Birdwell said.
Only funds for Medicaid and education come from general revenues. Water and transportation are being funded with money from the economic stabilization fund, which Birdwell referred to as the Rainy Day Fund.
Birdwell said he is unhappy with the way the budget is being allocated.
He said he wishes some of the money the state allocates to education, the state’s largest expense, would go instead to transportation.
“The Rainy Day Fund comes from the severance tax out of oil and gas revenues,” Birdwell said. “If the oil and gas industry takes a downturn, those revenues will drop, and my view is that we’ve deferred some of the hard decisions. While these were decisions that need to be made, it depends on our oil and gas industry always doing well.”
Birdwell quoted budget amounts from the past biennium, which is a period of two years.
“We’ve gone from a budget of $81.7 billion last biennium to $102 billion-plus this biennium,” Birdwell said.
“That is a major increase, and my concern with that is the structural expectation. While baseline budgeting is not a formal policy, the expectation is that we’ll spend in the next biennium above what we spent in this go around. Our state budget grew too fast for what I believe our economy can sustain.”
Birdwell went on to address specific issues facing the Texas legislature, focusing especially on education and water.
For the first time in 12 years, Texas is providing a cost-of-living allowance increase for retired teachers, Birdwell said.
Birdwell said he wants to “reduce the footprint of testing” in Texas schools. The state requirement that the end-of-course exams in schools make up 15 percent of a student’s final grade has been removed. It’s up to the schools themselves now how much weight the end-of-course exams will carry in determining a student’s final grade, Birdwell said.
“I’m interested in structurally looking at the entire state to make sure that what our requirements are, are meeting the needs of the state,” Birdwell said. “And so we do testing, but my purpose of sampling those tests is to see if structurally, our educational system is sound. Whereas the individual teacher testing with the student is to make sure they’ve mastered the material. But it’s the same test.”
Birdwell said academic options are now going to be expanded. Students, in preparation for graduating high school, have had the option of following three educational plans which are distinguished, recommended and minimum. Birdwell said the state of Texas is expanding the options that students have so that students have greater maneuvering power in choosing their educational and career path.
Birdwell said he wishes that some of the money that the state allocates to education would go instead to transportation.
The Texas Department of Transportation puts the money the state gives it in banks to make loans, and this is raising Texas’s debt, Birdwell said.
The “tail” of the Texas Department of Transportation is “wagging the dog” of the Texas Legislature, Birdwell said.
In a Q&A following Birdwell’s speech, Joe M. Rodriguez, the president and CEO of Cen-Tex Hispanic Chamber of Commerce, asked Birdwell to address his concerns with schools making tests easier so that students can pass.
Birdwell said he didn’t want to accuse any school of doing that by over-generalizing the issue, but it does happen. He added that the state has taken over leadership of the El Paso school district because of fraudulent testing, but said that there was evidence found of that fraudulence, and said that he doesn’t want to over-generalize on schools where evidence of fraudulence has not been gathered.
Texas is currently experiencing a new drought of record, Birdwell said.
“We have a serious water problem — primarily because the Lord just hasn’t sent the rain at the normal rates,” Birdwell said.
Texas is consuming more water because the population has grown, he said. Texans have consumed the excess cushion of water reserves, and Birdwell said he believes Texas needs more lakes to be built.
“So that when the Lord does send the rain, I don’t let it go to the Gulf of Mexico,” Birdwell said.
Kelvin L. Williams, who attended the speech, addressed Birdwell in the question and answer session with concerns about small farm owners in Texas.
“Most of our small farmers are having problems with water, and one of the things that they were concerned about is ponds and runoff and everything else, and that’s one of the things that’s very vital to them, to feed their livestock and also to water gardens,” Williams said.
Birdwell added that in 2011, ranchers were selling off herds in Bosque County.
“Our water circumstance is dire,” Birdwell said.
Birdwell said he does not like the tactic of taking money for water out of the Rainy Day Fund, but that he still voted in favor of it.
“We are too quick to touch our reserve,” Birdwell said. “When the piggy bank’s got money in it, it’s just too easy to go to it. It ought to be a calamity that is the reason we’re reaching for that. Our water circumstance is such a calamity.”
Money does not buy more water, Birdwell said. It buys the capacity to hold water “if the Lord sends it,” he said, adding that he feels Texans should pray for rain.
Ottis Foster, treasurer of the McLennan County Democratic Party, asked if there is a plan to put money back in the rainy day fund and Birdwell said there is not.
The fund is an allocation of one-time expenditures. Its basis is of revolving loans. The Texas Water Development Board loans out money, Texas pays it back and then the board can make another loan.
The Rainy Day Fund must be filled up with money from the tax on gas and oil revenues, Birdwell said.
Texas is putting $2 billion back in the fund each biennium, he said, but that depends on how oil and gas revenues are doing.