Americans for Tax Reform joined the Texas Public Policy Foundation and a dozen other conservative groups in sending a letter to Texas legislators which urged them to show spending restraint, protect the Rainy Day Fund, and avoid going down the path of fiscal ruin a la California and Illinois. The letter reads as follows:
"Honorable Members of the Texas Legislature:
The Lone Star State has become a model of economic growth through careful adherence to
thoughtful fiscal discipline. However, there are some trying to push the state in the direction
of more government, more spending, and more taxes.
We strongly urge the Legislature not to deviate from what has been a highly successful path.
Put simply: the Legislature should neither exceed the state's spending limit—by any
amount—nor should dollars be removed from the state's Economic Stabilization Fund (ESF)
to pay for ongoing government expenses or new programs.
California stands as an example for us. In the 1980s, California's economy was thriving and
tax receipts robust. Over the course of several decades, however, California lawmakers spent
everything they had and ran up debt to boot. Today, the lusterless Golden State is no longer
thought of as the nation’s economic powerhouse, and its finances are in notoriously poor
Texas must avoid becoming like California.
Ensuring that Texas does not suffer this fate begins with prudent decision-making on the
Economic Stabilization Fund. The ESF was established to address shortfalls in the budget
arising from economic downturns. By allowing that fund to go untapped in recent years and
maintaining a high level of liquidity, the state now enjoys the strongest possible bond rating—
a tangible benefit to taxpayers.
Drawing out dollars for expenses that could (and should) otherwise be budgeted from
General Revenues not only reduces liquidity and signals irresponsibility, but sets a dangerous
Similarly, in a time when revenues have increased more than 30 percent, lawmakers voting to
exceed the state's spending limit put the Lone Star State on a collision course with future
With the current administration in Washington doubling down on high taxes, increased debt,
and downgraded credit ratings, it is more important than ever that Texas not downgrade
Conservatives recognize that Texas has set a high standard and must continue to follow a
higher path. Legislators should reject calls to raid the ESF, and stand firm against “busting the