In Harvey's Wake

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Today’s Texplainer is inspired by a question from Texas Tribune reader Marco Portales. Send us your questions about Texas politics and policy by emailing texplainer@texastribune.org or through texastribune.org/texplainer.

Hey, Texplainer: Will Gov. Greg Abbott soon release some of the $10 billion Rainy Day Fund to help Texans affected by Harvey?

The Rainy Day Fund is the state’s savings account. Formally called the Economic Stabilization Fund, it was created in the late 1980s to keep the volatile oil industry from playing havoc with the state budget process. A portion of taxes on oil and gas production are now sent directly to the fund. For more than a decade, the fund had less than $1 billion in it. Then an oil and gas drilling boom that began a decade ago quickly grew the fund’s balance. Currently, it’s projected to have a balance of $10.3 billion at the end of August, according to the most recent estimate from the Comptroller's Office.

Accessing the fund for anything, including Harvey relief efforts, would require legislative action, and a two-thirds majority vote from the state House and Senate. It has been used over the years to fund various state needs, including disaster relief.

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The Legislature isn’t scheduled to meet again until January 2019. Gov. Greg Abbott could call them back for a 30-day special session, as he did in July to address a 20-item agenda. (UPDATE: On Friday, Sept. 1, Abbott said a special session wouldn't be necessary to address Harvey relief.) 

The Rainy Day Fund has always been a political hot potato. It’s been at the center of debates in the Capitol earlier this year over whether use funds to stave off budget cuts. Lawmakers ultimately agreed to tap the fund for about $1 billion to pay for repairs to the state’s aging mental health hospitals and other priorities.

Many Republican lawmakers have set a high threshold for using the state’s savings fund. Though it wasn’t created with this intention, various Republicans have said the fund needs to permanently maintain a large minimum balance to preserve the state’s high credit ratings.

If Abbott chose the former, there’d likely to be a political fight to prevent efforts to drain the fund completely — or maybe even mostly — for Harvey relief. That’s because neither state nor federal officials are currently aware how much recovery efforts will cost.

Over the past week, several lawmakers have expressed an interest in accessing the Rainy day Fund for Harvey relief efforts.

“I don’t think there would be any question that you would find consensus that this would be something that would be appropriate,” state Rep. Chris Paddie, R-Marshall, said in an interview with Texas Tribune CEO Evan Smith on Wednesday.

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It’s rarely used for disaster relief, however.

Though lawmakers may ultimately choose to tap the Rainy Day Fund to address Harvey, there are other ways for the state to get money for relief efforts.

Congress is expected to vote in September on an aid package related to Harvey. Energy Secretary Rick Perry said Thursday he's confident Congress will deal with federal aid "in a timely way” but had “no idea” how much the recovery efforts would cost.

"This is just going to take longer, it's going to be more difficult than any flood, any hurricane, any event that we have had. "

The bottom line: Gov. Greg Abbott would have to call lawmakers back for a special session if he wanted the state to use any of the billions in the Rainy Day Fund before 2019. While lawmakers have occasionally tapped the fund for disaster relief in the past, it's always politically tricky.

Read related Tribune coverage:

  • Gov. Greg Abbott said Friday another special session of the Texas Legislature won't be necessary to deal with the response to Hurricane Harvey. The Legislature isn’t scheduled to meet again until January 2019. [Full story]

  • The meteorological firm AccuWeather estimates the storm's impact on gross domestic product will be $190 billion – one percent of the U.S.'s current GDP – and more costly than Katrina and Sandy combined. [Full story]

  • After explosions in a Crosby, Texas chemical plant related to flooding from Hurricane Harvey, the public had no option but to trust government and company assurances that billowing smoke presented little danger. [Full story]

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