by Susan Combs
My father, a lifelong rancher, had a lot of interesting expressions that occasionally baffled me until I figured them out. For instance, he might say that somebody was staring off into the distance like a Fort Stockton dog. Fort Stockton is about 60 miles north of Marathon and the landscape is somewhat different in that the mountains are, well….far off. So that saying pretty well describes the far off look in the eyes of a Fort Stockton dog – and usually the person in front of you at a traffic light that just turned green.
My father was also a tightwad and proud of it. The expression he used a lot during the drought years was that we had to be as “tight as the bark on a tree” when it came to spending money – which means you clutched your green money tightly, because it was all that you had. And he didn’t have another source of income except for raising cattle and shipping them to market, hoping they had gained enough weight at an affordable cost so he would be net ahead when they sold. That didn’t always happen. He also spent a lot of time thinking about rainy days – which actually meant not so rainy days.
A lot of families and businesses do the same thing. In trying to anticipate tough times, they frequently set aside reserve funds for unexpected problems or opportunities – and their fiscal health is often tied to their reserves. We call those rainy day funds. The same careful approach SHOULD be true of state governments, but too often states do not have either the foresight or ability to put one of those into place.
Texas did that in 1988 after a very serious recession (not as bad as the most recent one) that forced a lot of Texans to think about how we could safeguard ourselves against another recession, or at least try to. Voters were asked to approve the idea and they did.
Our rainy day fund has been used for a lot of very worthwhile purposes, and right now – thanks both to a thriving oil and gas industry and conservative fiscal management by our leaders – it is sitting at over $6 billion. By the end of August 2015, it should reach over $8 billion, even after money is taken out to build roads, assuming the voters agree to do so in November.
By the way, that is a smart use of the money in my view. One-time expenditures for big infrastructure needs that help keep the economy humming are important.
So what about other states? You’ve read a lot about the various financial messes in Illinois, including the sorry state of Chicago’s finances. Rainy day fund? Zero. Zip. Nada. California, which is about 30 percent more populous than we are, has a fund of only about $1.5 billion, and New York has a little less than that.
Those states might look at their reserves and see a glass that’s half full. Well in Texas, we don’t settle for half full. That’s part of the Lone Star Success story, and that’s what our video this week illustrates. Take a look:
WOW! Texas is a rainy day giant (sort of like the Jolly Green Giant!) compared to these three other states.
And being as “tight as the bark on a tree,” to quote my dad, means that we have funds in reserve for when it is really needed – and to keep our Lone Star Success moving forward through unforeseen bumps in the road.
I am very pleased that we have a healthy reserve fund, which can be used for appropriate state purposes while keeping some in reserve in our state piggy bank. In Texas, you don’t have to settle for a glass that is half full.
Click here to read more about Texas’ Lone Star Success.