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Economic Stabilization Fund

Production of crude oil and natural gas has historically fluctuated based on a number of market-driven and geopolitical factors. Because the Texas Legislature collects severance taxes from this volatile production to primarily fund the state’s Economic Stabilization Fund (ESF), broadly considered the state’s “rainy day fund,” the purpose for and use of the ESF must be worthy.

The ballot language sold to Texas is clear that this money is to fill unexpected revenue declines. However, only 27.4%, or $3.2 billion, of the $11.6 billion spent from the ESF since inception has been for general deficit reduction.


  • Raise the threshold to use ESF money “at any time and for any purpose” from the current two-thirds of members present to four-fifths of all members in each chamber.
  • Lower the constitutional cap from 10% to 7% of biennial GR-re- lated funds in the previous biennium.
  • Use excess state revenue above the ESF cap or from budget reductions for tax relief instead of spending or investing it in riskier assets.

Talking points for liberty fighters

  • The ESF is expected to increase to $11.9 billion by the end of FY2019, which would be a record high.
  • Using one-time funds to pay for ongoing expenses is poor public policy.

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