Stage Five: Texas' Rainy Day Fund

The Rainy Day Fund is a savings account that Texas can use to cover a budget deficit, an unexpected revenue shortfall, or a natural catastrophe. Under Governor Rick Perry, this fund has been staunchly protected from being utilized during these tough economic times. One event was the Bastrop County wildfires of 2011. The Rainy Day Fund was also considered to fill budget gaps in public school education and Medicaid, particularly gaps affecting the elderly, the Children’s Health Insurance Program (CHIP), and providers of those services. Since Texas is sitting on a hefty nest egg of approximately six billion dollars, is there any reason why it should not be utilized for such emergencies as it was intended to cover?

The probability of natural disasters such as wildfires occurring during a drought season calls for urgent measures to pay for it through available revenue. Perry has repeatedly stated he is protecting the fund because it is an insurance policy in case of a major natural catastrophe. If the wildfires are not a major unforeseen act of nature in the same category as hurricanes and floods, what kind of event are they classified under? The Bastrop County wildfires alone have cost the Texas Forest Service over a million dollars while this agency has seen dramatic budget cuts as it battles blazes in the middle of its wildfire season.

Another issue affecting many Texas students is the quality education they deserve through the public school system and the means to provide it with an appropriately funded budget. How can legislators justify slashing school budgets more when they are already operating on a shoestring budget? This is an inequality to Texas schoolchildren and presents a quandary for public school administrators.  Faced with substantial expected staff layoffs, these cuts will have an adverse effect on the education students receive.

Additionally, Medicaid recipients and providers cannot continually withstand reduced benefits which they were forced to accept under the mandate of Governor Perry in order to balance the state’s budget deficit. Medicaid’s reduced benefits are felt on a vulnerable population – the elderly and children. Slashing aid on someone with a serious ailment could be detrimental to the quality of their life and a costly financial burden to sustain. Decreasing CHIP funds unfavorably affects children and pregnant women mostly in rural communities where many Texans are financially needy. Physicians are unable to offset their costs and forced to turn away Medicaid patients. Hospitals, which are paid additional disproportionate share funds for Medicaid patients, will see their revenue repayment decline in the proposed budget cuts.

While public school education and Medicaid are controversial and important issues affecting many Texans, these entities have a continual need for increased revenue funding as their growth expands. Public schools can find different approaches to raise revenue by property tax increases, trimming administrative costs, or possibly closing schools failing to meet academic achievement standards. Medicaid should be categorized as a national problem, serving the needs of the economically disadvantaged whose eligibility and population growth will continue to rise. Its reform must take place at the national government level due to the complexity of the many healthcare areas it encompasses. Public school education and Medicaid simply cannot be fixed with increased spending or budget cuts alone and requires much more careful deliberation with their respective interested parties.