DALLAS — Texas voters would be asked to approve the use of $6 billion from the state rainy day fund for water and road projects under a measure under consideration in the state Senate.
Senate Joint Resolution 1 — sponsored by Senate Finance Committee Chairman Sen. Tommy Williams, R-The Woodlands — would amend the state constitution with voter approval to create the State Water Implementation Fund and the State Infrastructure Fund.
The measure would call for an election Nov. 5 to allow the transfer of $2.5 billion from the Economic Stabilization Fund — known informally as the "rainy day fund" — to the State Water Implementation Fund on Nov. 30.
Another $3.5 billion would be transferred from the rainy day fund to the State Infrastructure Fund.
Williams' committee on Thursday cleared the measure for a full vote in the Senate.
The Texas House of Representatives has already passed unanimously House Bill 4 establishing a State Water Implementation Fund of Texas, or SWIFT, to serve as a water infrastructure bank to boost financing resources the Texas Water Development Board, the state issuer of bonds for local water utilities.
The fund transfers under SJR 1 would be the largest ever approved by the legislature. The rainy day fund balance had been expected to grow to nearly $12 billion if left intact.
Texas schools, which in 2011 took $5.4 billion in cuts — the first in their history — hoped to get some funding restored from the rainy day fund.
Gov. Rick Perry and other state leaders have been staunchly opposed in recent years to use the fund, even in 2011 when the state faced a $27 billion shortfall.
The state water plan says the state needs to allocate $53 billion over the next 50 years for water projects to keep up with the state's growth.
The Texas Water Development Board, one of the state's largest debt issuers, would be allowed to leverage the new fund with revenue bonds backed by revenue from the local utilities and backed by the state's general obligation pledge for very low interest costs.
Texas is rated triple-A by Moody's Investors Service and Fitch Ratings and AA-plus by Standard & Poor's.
The resolution proposes an amendment to Section 49-p, Article III of the Texas Constitution to allow money deposited to credit of the State Highway Fund to be appropriated to repay the principal and interest on bonds.
The Texas Department of Transportation anticipates that $4 billion annually would be needed to keep up with maintenance of the state's roads and bridges. A provision in SJR 1 prohibits the money from being spent on passenger rail.