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Thu Feb 28, 2019, 05:00 AM

Texas Has Ample Money In Its Rainy Day Fund. Now The Legislature Has To Decide How To Spend It.

Texas’ Economic Stabilization Fund, commonly referred to as the rainy day fund, is approaching record levels. It reached $11 billion in 2018, and Texas’ comptroller estimates it will reach $15 billion by the end of 2021. During the current legislative session, some lawmakers are trying to decide if and how to use some of that money.

Ben Philpott, senior editor at KUT News, has been following the various proposals. He says lawmakers over the years have aimed to hold onto a “safe amount” in the rainy day fund in order to maintain the state’s AAA – or exceptional – bond rating. A high rating matters because it signals to investors that Texas is a safe place to put their money. During the last couple sessions, though, Philpott says the legislature decided that $7 billion or $8 billion in reserves is enough to maintain the state’s bond rating.

“They’ve set on about $7.5 billion to leave in there, as a minimum,” Philpott says.

Philpott says Texas’ Comptroller Glenn Hegar says Texas is being too conservative with the money, and as a result, it’s not being invested in a way that generates enough return to keep up with inflation.

Read more: http://www.texasstandard.org/stories/texas-has-ample-money-in-its-rainy-day-fund-now-the-legislature-has-to-decide-how-to-spend-it/

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