Abbott Proposes Constitutional Limits to Spending, Rainy Day Fund

In his first major policy address as a gubernatorial candidate, Attorney General Greg Abbott proposed tighter constitutional limits on state spending and increased constraints on the multibillion-dollar Rainy Day Fund.

Abbott laid out his “Working Texans” plan, which is based on fiscal reform to reduce the scope of government, during a campaign stop Monday in Brownsville.

Abbott said that if he were elected governor, he would propose two constitutional amendments to keep state spending tied to population growth and inflation and to safeguard the Rainy Day Fund, the state’s savings account, from “being raided” by the Legislature.

Additionally, Abbott said the governor should be given “expanded line-item veto authority” to reduce excessive spending. He will face former Texas Workforce Commission Chairman Tom Pauken in the 2014 Republican primary. 

“I am willing to take on the task of making difficult decisions to reduce government spending when at times the Legislature may not be able to do so,” Abbott said, according to prepared remarks, adding that the state has seen “a troubling trend” of using the Rainy Day Fund to cover “what should be core government operations and expenses. “

Instead, Abbott wants to limit the excessive spending of the fund by only allowing it to be used to meet unforeseen revenue shortfalls, to reduce existing debt, to pay for state disaster relief and to address one-time infrastructure payments.

Last week, Abbott spokesman Matt Hirsch said the attorney general supports Proposition 6, a constitutional amendment that would create a water development bank for projects designated to help meet the state’s need for water amid a heavy drought with $2 billion from the Rainy Day Fund.

Abbott’s support for Prop 6, which will be decided by voters in the Nov. 5 election, is on the basis of a one-time draw from the fund, Hirsch said.

In his proposal, Abbott also emphasized the importance of finding a permanent source for additional transportation infrastructure, including a proposal to constitutionally divert a portion of the motor vehicle sales tax to road construction and maintenance.

“We need to stop diverting transportation funding away from building roads,” Abbott said. “Money raised for roads should be spent on roads.”

Earlier this summer, the Legislature also used the Rainy Day Fund to increase transportation funding. Lawmakers passed a measure to redirect tax revenue earmarked for the Rainy Day Fund to cover costs related to road construction and maintenance.

Democratic gubernatorial candidate Sen. Wendy Davis supports funding both measures through the Rainy Day Fund. Davis voted in favor of setting up Prop 6 as a constitutional amendment when it came to the Senate floor. She also voted in favor of the transportation funding plan during the third special legislative session this summer.

During this year's legislative session, Davis also supported using the Rainy Day Fund to reverse millions in budget cuts to public education made during the 2011 legislative session.