DALLAS – A bill that would have provided $2 billion of bonds from the Texas rainy day fund for water projects appeared dead in the state House after a procedural move by opponents.
House Democrats, who want to tap the projected $11.8 billion rainy day fund to restore lost funding for education, raised a point of order about the sequence of appropriations, sidelining House Bill 11, which contained the bond program.
State Rep. Sylvester Turner, D-Houston, raised the question about a House rule preventing any appropriation for a particular purpose unless lawmakers had already approved and certified the general state budget.
To save the bond program, Republicans are expected to expand House Bill 19 by Rep. Drew Darby, R-San Angelo. HB 19 would apply $3.7 billion from the Rainy Day Fund toward transportation and water in unspecified sums.
A compromise proposal would take $6 billion from the fund, including $2 billion for water, $2 billion for transportation and $2 billion for education. Along with other budget bills that restore about half of the $5.4 billion of education funding cut in the 2011 session, additional school funding would come to $4.5 billion.
Known formally as the Economic Stabilization Fund, the rainy day fund accrues from oil and gas taxes and is projected to have about $11.8 billion by the end of 2015. The current session is considering a two-year budget beginning Sept. 1.
The water bond program, know as the State Water Implementation Fund for Texas (SWIFT), would be a self-perpetuating fund whose debt would be paid off by the local water utilities that benefit from the state’s triple-A general obligation rating.
Under a version of the bill passed unanimously in the Senate last week, Texas voters would be asked to approve use of $6 billion from the rainy day fund for water, transportation and education.
House Bill 11 was a companion to House Bill 4, which establishes the SWIFT but provides no funding. HB 4 won nearly unanimous passage in the House in April. HB 11 would have allowed a specific amount of funding from the rainy day fund.
Under HB 4, the Texas Water Development Board would administer SWIFT. The TWDB carries ratings of AA-plus from Standard & Poor’s and triple-A from Moody’s Investors Service and Fitch Ratings, which lowers interest costs for local water utilities that then sell their bonds to the board. The board issued $52 million of GO bonds in January.
