Texas Governor Denies Houston Request For 'Rainy Day Funds'

HOUSTON, TX — Houston received more than 50 inches of rain from Hurricane Harvey, but the city won't see one penny of the state's Rainy Day Fund for recovery anytime soon. Houston Mayor Sylvester Turner requested Rainy Day Funds on Tuesday from Texas Governor Greg Abbott, who swiftly declined money from the reserve account. Abbott said the state has already earmarked money for Harvey relief and recovery, and that Houston already has enough money that has gone untapped.

Texas has a $10 billion economic stabilization fund reserve fund called the Rainy Day Fund. Turner's request to Abbott Tuesday stated that using part of the $10 billion-plus in the Rainy Day Fund "is appropriate for (the) response to a natural disaster such as Harvey that wreaked significant damage and caused local governments to incur unanticipated costs far beyond their budgets."

The letter from Abbott said that although the total amount of damage has yet to be determined at this point, the federal government will pay for 90 percent of debris removal costs. Turner stated Houston's portion could be $25 million of the state's total estimation of $250 million.

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Abbott said Tuesday the state has already allocated $100 million for debris pickup and an "accelerated reimbursement program" for recovery efforts. The governor did say Rainy Day Funds will be used for hurricane and flooding reimbursement, but that a special session would not be called and it will be decided upon in the next legislative session that begins in January 2019.

Abbott added that Houston has enough resources to take care of itself before the next state legislative session.

"In times like these it's important to have fiscal responsibility as opposed to financial panic," Abbott told reporters.

Turner said if the state turns down immediate request for Rainy Day Funds, then they city would have no choice but to implement a temporary, emergency hike on property taxes. The mayor is seeking the city council's approval for an increase that would cost the owner of an average Houston dwelling $4.03 per month for a year.

Texas legislators meet every other January right after state elections are canvassed and candidates are sworn in. Abbott has the authority to call Texas lawmakers in the interim for special session lasting up to 30 days, like he did this summer to address a 20-item agenda.

State Senator Paul Bettencourt, a Republican from Houston, predicted Abbott would call a special session sometime soon to address Harvey, which has become more costly than Hurricane Katrina and Super Storm Sandy combined.

"My personal assumption right now is that we will probably be back in Austin at work no later than January," Bettencourt told the Houston Chronicle on Thursday. "The governor and the Legislative Budget Board have the ability to move around quite a bit of money in current appropriations, but it probably won't be enough when all the bills come in. This storm is going to cost more than (hurricanes) Katrina and Sandy put together, and I'm thinking we'll be breaking the $200 billion mark before this over."

Hurricane Harvey damaged more than just Houston and the Bayou City region. Harvey hit Rockport as a powerful category 4 storm, leveling many buildings and crippling the Texas Coastal Bend. Harvey moved east and hovered over Houston, dumping more than 50 inches of rain in many places. Harvey then battered the Golden Triangle for three days, leaving towns like Beaumont, Orange and Port Arthur as separate islands.

Texas voters approved a constitutional amendment to create the Rainy Day Fund in 1988 following an oil price plunge and economic recession that forced lawmakers to raise taxes to keep state government in the black, according to the state comptroller's website. The Legislature structured the fund to automatically set aside some tax revenues in boom years to help the state during downturns. Subsequent legislation and another constitutional amendment made further changes to its funding mechanisms.

If no funds are tapped, the reserve amount will reach $10.3 billion by the end of fiscal year 2017 and up to $11.9 billion by the end of fiscal year 2019.

Top image: Texas Governor Greg Abbott delivers a briefing to the public on Hurricane Harvey at the Texas Department of Public Safety building on September 1, 2017 in Austin, Texas. Hurricane Harvey has caused wide spread flooding and mass evacuations in the Houston area.

Photo by Drew Anthony Smith/Getty Images