“It was like burying the money in a hole on the Capitol lawn.”
That was Texas Comptroller Glenn Hegar’s reaction upon discovering that state law required his office to hold billions of dollars within the Economic Stabilization Fund (ESF) without investing the money to keep pace with inflation. The Legislature has since allowed the Comptroller’s office to invest part of the ESF so that it can earn enough to cover inflation.
The Comptroller’s office is proposing a more significant change: creation of the Texas Legacy Fund. A portion of the ESF would be used to establish an endowment that could generate more revenue to address Texas’ long-term financial obligations. The proposal would maintain a healthy balance in the ESF and preserve its ability to protect state finances in times of economic volatility.
An examination of growing state obligations — and ways to mitigate their effect on state finances.