How to Make Texas Oil Money Last? Don't ‘bury It in the Capitol Lawn'

Texas’ oil and gas won’t flow forever, even with the fracking boom. But there may be a way to make the money last.That’s the idea behind creating a sovereign wealth fund fueled by natural resources.Several states and nations have put billions of dollars from oil, gas and coal into investments that grow the principal and throw off earnings along the way. But not Texas, although this is an opportune time to consider a move -- and the comptroller is pushing for it.Oil production is booming, natural gas fields are abundant and the state’s rainy day fund, which bolsters the budget in a downturn, is overflowing.Texas has nearly $11 billion in the Economic Stabilization Fund, primarily from oil and gas taxes. That's roughly three times more than the state has withdrawn in a two-year period. Most of the dollars are invested in near-liquid securities that don’t earn enough to keep up with inflation.“It’s like taking money and just burying it in the Capitol lawn,” Comptroller Glenn Hegar told a Senate Finance Committee two weeks ago.At least $3 billion could be spun out as a separate endowment, he said, and the fund could continue to grow from investment earnings and excess oil and gas taxes. This so-called legacy fund could generate $1 billion annually by 2030 and over $3 billion a year a decade later, Hegar estimated.  Continue reading...

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