This morning comptroller Susan Combs will release her revenue estimate of the money that will be available for the Legislature to spend in the next biennium. Expectations are that the estimate will come in showing little or no revenue growth. The state treasury does have a surplus of more than $11 billion, but more than half of that is in the economic stabilization fund–that’s the Rainy Day Fund to you and me–and can only be spent with the approval of 2/3 of the members of each house.
In the meantime, the state doesn’t have the money to fulfil the promises it made to cut property taxes and fund public schools. And business tax collections are well below initial projections; whether the problem is the projections or the collections is something that the Legislature needs to ask the comptroller.
Another question for Combs to answer is the health of the two big pension funds – the Teacher Retirement System and the Employees Retirement System – given the turmoil in the financial markets. It makes me very nervous that the head of the TRS ran up a $100,000 gambling debt in Vegas before Perry dumped him. People with gambling debts are easy targets for nefarious people with nefarious motives. Legislative leaders should immediately seek an audit of TRS and its investment practices, not only to determine the financial health of the system but also to ascertain whether the retirement system was investing in the kind of risky, exotic instruments that brought down the nation’s financial system. The governor’s office successfully installed a former Perry staffer in a key position at TRS, after a bitter fight on the board, resulting in the resignation of respected senior TRS administrators. I cannot see any good motive for destabilizing the management of a multi-billion-dollar pension fund. With the belated exception of TxDOT and TYC, the Legislature hasn’t flexed its oversight muscles in three sessions. Now’s the time.