Fund Balance vs Rainy Day Fund
I served on the Henrietta ISD school board for 21 years. Every year we heard the audit report from an outside auditor and every year we got a glowing report with one exception. Every year we lost points because we had too much money in our fund balance. A fund balance to a school is like your savings account. It's also similar to the rainy day fund that Texas created a few years ago for the same purpose.
The state's criticism of our fund balance was that we shouldn't keep too much money in our account, so they would threaten to cut the amount the state would pay for their part in educating our students. They believed the money would be better managed in their accounts in instead of our school district.
Today, Texas is holding over 18 billion dollars. That $18 billion is an estimate based on unspent money from the comptroller’s revenue estimate plus the expected ending balance of $11.1 billion in the state’s so-called Rainy Day Fund. The name Rainy Day Fund implies holding onto the money for a rainy day when the revenues aren’t there to pay the bills, but this really should be called the Texas Hoarding Fund.
So, how is the Texas Rainy Day Fund different that school districts were holding money in their accounts for emergencies? Emergencies such as when the state chooses not to live up to their obligation of educating Texas children as the State Constitution requires.
If we are not going to use it during the lifetime of the taxpayers who made it possible, then it needs to go back to the taxpayers.