The $650 Million Cookie Jar the Lege Can’t Resist

Rep. Sylvester Turner fumes over the raiding of the System Benefit Fund


One of the many, many potential casualties of the budget crisis in Texas is an important program that helps elderly and low-income people pay their electricity bill. Called the System Benefit Fund, the program is funded by a 65-cent monthly fee charged to Texas ratepayers living in the deregulated parts of the state. At a House budget hearing yesterday, Democrats heatedly accused lawmakers and the Public Utility Commission for raiding the fund in order to balance the budget.

“This budget, to the extent we decide to do this, becomes an attack on senior citizens,” said Rep. Sylvester Turner, a Houston Democrat who helped create the System Benefit Fund in 1999. “We are closing nursing homes and kicking them out onto the street. And for those who are not on the street and in their homes this budget is getting ready to turn off their lights. That’s exactly what we’re doing. And I’m not going to sit here and act like this is just some sheet of paper with numbers on it… I may be outvoted but I’m certainly not going to sit here silently and act like it’s not going to hurt people out there on the streets. I’m not gonna do it.”

For years, the Legislature and the Public Utility Commission have been whittling away at the System Benefit Fund. How could they not resist? About $650 million is sitting in the program’s account – a cookie jar filled to the brim.

The hearing yesterday dealt with the so-called supplemental, House Bill 4, which seeks to plug a $4.3 billion budget shortfall for 2011. The bill wipes out $86.6 million from the System Benefit Fund – money that would have gone to low-income and elderly folks during the summer months.

That figure, $86.6 million, is much higher than what the governor’s austerity measures for this biennium actually required. What happened is that last month the Public Utility Commission, run by three Perry appointees, voluntarily reduced the electric bill discount from 17 percent to 10 percent. If the PUC had just followed the governor’s orders to find savings of 7.5 percent, then there would have only been a $10 million reduction to the System Benefit Fund, according to testimony from the Legislative Budget Board.

Brian Lloyd, the executive director of the PUC and former deputy budget director for Gov. Perry, defended the move as a way to free up money to be used in the supplemental bill. That didn’t sit too well with Rep. Turner, who later lambasted Ken Armbrister, Perry’s top aide.

“I want a governor to stand up for the poor and less fortuante as well as those who are maybe more fortunate,” Turner said, visibly angry. “I want him to fight for the least of those as well as those who are more able to fight for themselves.”

The Legislature has certainly played a part in robbing the System Benefit Fund as well. The House draft budget for 2012 and 2013 slashes the program by 25 percent, reducing the money available to folks over the next two years from $225 million to $169 million.

While the Republicans promise to balance the $27 billion budget shortfall without raising taxes, they are using hidden fees to do so. Some Democrats, including Rep. Turner, are challenging the approach as deceptive. The Lege, they argue, is allowing hundreds of millions to accrue in a state account – unspent on its intended purpose – in order to certify the budget every two years. The losers are elderly and low-income individuals struggling to pay Texas’ high, deregulated electric rates.

“The System Benefit Fund is being used as a tax by all of us here to balance this budget,” Turner said. But if history is any guide, this Legislature will have no problem robbing Peter to pay Paul.

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