Texplainer: Can Texas Use the Rainy Day Fund to Fight Wildfires?

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Hey, Texplainer: Why doesn’t Rick Perry use money from the state's Rainy Day Fund to help fight the wildfires and assist folks who have lost their homes?

Earlier this year, Gov. Rick Perry led the fight to prevent the state's Rainy Day Fund from being used to help fill the state's enormous budget shortfall for the 2012-13 biennium. After an earthquake and resulting tsunami devastated parts of Japan on March 11, Perry cited it as an example of the kind of unexpected catastrophe that could hit Texas — and a reason not to tap the state's giant savings account.

“One of the things that I remind people, in why it is so important to protect that [fund] is … it is our insurance policy against a major natural disaster,” Perry said on March 14.

But the Rainy Day Fund can’t actually be used in that capacity unless agreed upon in the Texas Legislature by a two-thirds majority of the state House and Senate during a legislative session. The 82nd Legislature ended its regular session on May 31; a special session concluded at the end of June. In a letter on Friday, 14 Democratic House members called on Perry to call a special session of the Legislature in order to tap the Rainy Day fund for fighting wildfires.

Money comes from both the state and federal government to cover the cost of fighting wildfires and other disasters. Since there is no way to forecast when such a disaster will occur or how much it will cost, the state will reimburse the agencies, such as the Texas Forest Service, in the form of a supplemental fund to be determined during the next legislative session in 2013. That money can come from a variety of resources, including the Disaster Contingency Fund, which has about $49 million remaining, or the Rainy Day Fund, which is expected to contain $6.4 billion by August 2013.

There are other ways to get money when the Legislature isn’t in session, such as transferring funds within the state budget from one agency to another. But Dick Lavine, senior fiscal analyst with the Center for Public Policy Priorities, said there’s hardly a surplus in the state budget after the 82nd Legislature to do that. 

On Sept. 9, the White House granted a limited disaster declaration in response to a formal request made by Lt. Gov. David Dewhurst. The partial request provides individual assistance from Federal Emergency Management Agency for those who lost homes or property as a result of the Labor Day fires in Bastrop County. A previous declaration request for the fires beginning March 1 has not been accepted.

Since January, wildfires have scorched more than 3.6 million acres of land. Insurance Council of Texas estimates place the damage for Labor Day weekend alone to exceed the 2009 cost in insured losses of $115 million.

Asked about potential use of the Rainy Day Fund for the wildfires, Lucy Nashed, a spokeswoman for the governor's office, noted that Texas was only 12 days into the fiscal year, and "you never know what next two years will bring." The Rainy Day Fund, she said, is an "important resource to have," but "not something we're addressing today." The state has other options too, she said, like a disaster contingency fund.

Nashed also said: "If there are immediate needs for responding to these wildfires, the Legislature has built in some flexibility and some options for state agencies to address that. We will certainly look at a supplemental appropriation to the agencies based on the total cost of the fire, and once we know what the total cost to state is going to be."

Bottom line: The Rainy Day Fund is not to be used as an emergency fund; therefore, money can only be taken out when the 83rd Legislature convenes in January 2013, unless the governor calls a special session before then.

Got a question for Texplainer? Email us at texplainer@texastribune.org.