Texas has a $10B "rainy day" fund but won't use it for Harvey relief

It there was ever a reason to tap a rainy day fund, you’d think Hurricane Harvey recovery would be it. But Texas Gov. Greg Abbott says he won’t need to dip into the state’s $10 billion fund, the largest of any state’s in 2016, and that has some Texas lawmakers very worried.

Abbott thinks the state will have enough resources without it, between federal and private aid, plus $100 million in disaster recovery grants that he can reallocate from the state budget thanks to the disaster designation. Abbott is also working with the Michael and Susan Dell Foundation to raise $100 million in private donations for relief efforts.

“We won’t need a special session for this,” Abbott told reporters last Friday. A special session is the first step needed to unlock the roughly $10.3 billion in funds sitting in the state’s Economic Stabilization Fund. Abbott said Texas has enough resources to “address the needs between now and the next [legislative] session.”

Texas also received welcome news from Washington Wednesday, when President Trump struck a deal with the senior Democratic congressional leadership to fast-track a $7.9 billion Harvey aid bill to his desk.

Still, some officials in Texas worry these sources of aid could be delayed, and end up being too little too late.

The fund needs two-thirds approval from the Texas Legislature to pass disaster relief, but they’re not in session now and aren’t due to meet again until January 2019, unless Abbott reconvenes a special session.

“The regular session is a year and a half away,” Gene Wu, a Democratic state House rep from Houston, told the El Paso Times. “In reality, it’s almost two years away for a bill to get through and passed. We have people who have lost every single thing in their entire world.”

Houston, which bore the brunt of the storm, is already running low on resources just a week after the rain stopped. Mayor Sylvester Turner wrote to Abbott Monday saying the city’s coffers are “facing unprecedented strain.” He said he’s already allocated the city’s entire $20 million rainy day fund, but “this funding will be quickly exhausted.”

People calling on Abbott to convene a special session and use the rainy day fund aren’t going against the norm. In the past, the fund, derived from oil and gas taxes, has been used for disaster relief and other reasons for example, earlier this year, the Texas Legislature spent about $1 billion of it to update Texas’ mental health hospitals.
Abbott also called a special session in July that addressed a host of issues, like ballot fraud, abortion restrictions, and election rules.

Harvey, which dumped record rain on the Houston area, is on track to be the costliest natural disaster in U.S. history, with damages estimated at $190 billion. It’s still too early to tell how much recovery will cost.