Fiscal Notes: Long-Term Obligations and the Texas Legacy Fund
(AUSTIN) — In the September/October special edition of Fiscal Notes, released today, the Comptroller’s office continues its efforts to highlight the causes, costs and consequences of certain long-term financial obligations the state faces and offers a proposal to help meet these expenses by investing the state’s savings more strategically.
This is the first in a series of special editions of Fiscal Notes prepared by the Comptroller’s office that examines issues state lawmakers are expected to face when they return for the 86th Texas Legislature in January.
The costs associated with state employee pensions, health care benefits for retired teachers, the state’s prepaid tuition plan and deferred maintenance for state-owned buildings are sometimes overlooked in the grind of budget writing. Yet if these costs are not addressed, Texas is sure to face more considerable program expenses in the future — and may face a credit downgrade that would drive up the state’s borrowing costs.
“These obligations must be met, sooner or later, and the longer we wait, the more money they’ll require,” said Texas Comptroller Glenn Hegar. “My office is proposing a new way to begin addressing this situation through what I call the Texas Legacy Fund — a permanent endowment for the state, created from a portion of the state’s ‘rainy day fund,’ which would generate investment earnings specifically for addressing long-term obligations.”
Fiscal Notes is available online and can be received by subscribing via the Comptroller’s website.
Fiscal Notes helps promote and further explain the Comptroller’s constitutional responsibility to monitor the state’s economy and estimate state government revenues. It has been published since 1975, featuring in-depth analysis concerning state finances and original research by subject-matter experts in the Comptroller’s office.