DALLAS — Texas Gov. Rick Perry met Monday with Republican lawmakers and urged them to avoid tapping the state’s $9 billion budget stabilization fund to help close a $27 billion revenue gap over the next two fiscal years.
After the closed-door meeting, Perry told reporters that tapping into the rainy-day fund would be acceptable only as a last resort.
“I specifically asked them to look at all the different options before they would ever come to the point of saying, OK, that is an option,” Perry said. “We’re not there. The well has somewhat — I won’t say run dry, but the water flow has been restricted.”
The state’s shortfall, including the current fiscal year and the next biennial budget that begins Sept. 1, is estimated at between $15 billion and $27 billion.
Perry said he told lawmakers to consider the reserve funds held by school districts and state colleges before deciding whether to tap the rainy-day fund.
“It’s about $12 billion in reserve accounts in our independent school districts. So should the state spend their rainy-day fund before those are accessed?” the Republican governor asked. “My answer is, no, I don’t think so. I kind of reminded them to be focused and disciplined, and ask all the right questions.”
A Texas Education Agency spokeswoman said local districts have $10 billion in reserves and $2 billion in federal stimulus funds that must be obligated by Aug. 31.
The current budget bill in the House calls for $9.8 billion of cuts in aid to school districts from current spending, while the Senate version cuts $9.3 billion.
Rep. Jim Pitts, GOP chairman of the House Appropriations Committee, filed a bill last week that balances the current budget with $4.3 billion from the rainy-day fund, which would free up an equal amount for the next two-year budget cycle.
Pitts said the $30 billion of cuts proposed by Perry for the fiscal 2012-2013 biennium budget would devastate public education and health care programs.
He called the proposed cuts “frightening,” adding: “You don’t have to be liberal or conservative for this to touch you.”
Pitts said he has the 90 votes necessary in the House to pass his budget bill.
The rainy-day fund is designed for financial emergencies, he said, and the current situation fits that description.
“The reality is, we do not have the funds to pay our bills,” Pitts said.
The fund, which was established in the late 1980s, currently contains $8.2 billion but is expected to grow to $9.4 billion by the end of the next biennial state budget on Aug. 31, 2013.