Texas Senate Bill SB69

Texas 2019 - 86th Regular

Caption

Relating to the allocations of money for transfer to the state highway fund and the economic stabilization fund and the investment of money in the economic stabilization fund.

Impact

With the proposed changes, the bill is expected to have notable implications for state financial management, particularly in how Texas allocates and utilizes funds intended for economic stabilization. The revised structure is intended to ensure that funds are not left idle and can be used effectively to meet state fiscal needs. The bill is designed to improve fiscal management by allowing the state to leverage the funds better and respond to economic demands more dynamically.

Summary

Senate Bill 69 aims to reform the management of the Economic Stabilization Fund (ESF) in Texas by allowing for more significant investment options and altering how the sufficient balance is determined. Specifically, the bill abolishes the existing sufficient balance committee and establishes a new standard where the sufficient balance will be set at 7% of available certified general revenue. This allows for up to 75% of the ESF to be invested by the comptroller, enabling better use of the fund's resources to potentially earn higher returns.

Sentiment

Discussion surrounding SB 69 appears largely positive among proponents who believe that the bill reflects sound fiscal policy and improves upon the previous management practices. Supporters argue that investing a large portion of the ESF can yield better returns and that the current practice of allowing funds to sit uninvested is not in the state's best interest. On the other hand, concerns may arise regarding the potential risks associated with increased investment activity and whether the comptroller has the necessary oversight mechanisms to manage such investment strategies effectively.

Contention

Despite the overall positive sentiment, there may be contention around the bill given the significant shift in fund management authority from a committee to the comptroller’s office. Critics could argue that this diminishes checks and balances on investment decisions and increases the risks associated with managing such a significant pool of state funds. The success of the bill will depend on the ability of the comptroller to manage investments wisely while ensuring the liquidity necessary to meet the economic stabilization fund's obligations.