With record $12.5 billion in Texas' savings account, lawmakers set $7.5 billion minimum balance

[TexasTowelie]

By Edgar Walters, Texas Tribune


As Texas’ savings account swelled to a record high of $12.5 billion this week, a group of state lawmakers on Friday unanimously agreed that the state should leave more than half of it untouched over the next three years.

The joint Economic Stabilization Fund Balance Select Committee voted to keep the Rainy Day Fund’s minimum balance unchanged at $7.5 billion — the same figure they chose in 2016, ahead of their last legislative session.

The unanimous decision by the panel means that stewards of the fund can invest more money in higher-return investments, as they hope to keep it growing at a rate that is at least equal to inflation. If lawmakers had chosen to raise the account's minimum balance, it would have required more money to remain available for emergency spending, thus limiting investment potential.

The question on lawmakers’ minds Friday was whether leaving the minimum balance unchanged could affect the state’s credit rating; State officials told them that ratings agencies like to see states have a healthy amount of cash on-hand for emergencies.

Read more: https://www.texastribune.org/2018/11/30/rainy-day-fund-125-billion-texas-lawmakers-set-75-billion-floor/


Three suggestions since Texas is in decent financial shape. Adopt at least one of them and I'll be satisfied:

1) Expand Medicaid. Why should Texas be subsidizing the Medicaid programs in other states that adopted the ACA Medicaid expansion? In the long term, it will save the state money.
2) Increase benefit payments for SNAP and TANF. Those benefits have a stimulative effect on the economy.
3) Add more goods that are exempted from the regressive state sales tax. Exemptions for items such as diapers, children's clothing, and school supplies would have a positive effect on young families.