News Flash

Home

Posted on: January 9, 2019

Texas Comptroller Glenn Hegar gives lawmakers cautiously optimistic revenue estimate

Glenn_Hegar_Biennial_Revenue_Estimate_2

BY EDGAR WALTERS

Texas Legislature 2019

The 86th Legislature runs from Jan. 8 to May 27. From the state budget to health care to education policy — and the politics behind it all — we focus on what Texans need to know about the biennial legislative session.

 MORE IN THIS SERIES 

At a time when legislators are vowing to spend more money on public schools and slow the growth of Texans’ property tax bills, the state should have enough money at its disposal to do just that.

That is, if its newest predictions hold true.

Texas Comptroller Glenn Hegar on Monday offered a cautiously optimistic outlook for the Texas economy, telling lawmakers they will have about 8.1 percent more state funds available to budget for public programs — primarily schools, highways and health care — in 2020 and 2021. Hegar projected there would be about $119.1 billion in state funds available for the next two-year budget, up from $110.2 in the last two-year budget.

But falling oil prices in the last month, along with heightened uncertainty in the U.S. economy and international financial markets, led Hegar to deliver a "cloudy" forecast with some trepidation.

"We remain cautiously optimistic but recognize we’re unlikely to see continued revenue growth at the unusually strong rates we’ve seen in recent months," he said.

In the odd-numbered years when the legislative branch of Texas’ state government convenes in Austin, the comptroller traditionally kicks things off by gazing into a crystal ball of financial modeling. The result is the biennial revenue estimate, delivered as a Powerpoint presentation in an underground Capitol auditorium, which guides lawmakers as they decide what to spend on public programs or tax cuts in the coming years. The amount of money available can vary greatly, depending on how the state’s economy performs.

Meanwhile, the state's savings account, known as the rainy day fund, is projected to reach a record high balance of $15 billion. Lawmakers will debate whether to dip into that Economic Stabilization Fund to pay for bills coming due from the last two-year budget period, including Hurricane Harvey recovery, and in the upcoming two-year budget.

Advocates for greater investment in public schools reacted positively to the revenue estimate, saying lawmakers now have no excuse not to increase spending, given a growing budget and unprecedentedly large savings account balance.

"This is good news," said Eva DeLuna Castro, a state budget analyst at the left-leaning Center for Public Policy Priorities. "This is enough to not cut state services."

One note of fiscal underperformance was slower growth in motor vehicle tax collections. Hegar noted that car and truck sales did not yield enough tax revenue to reach $5 billion per year, which will result in slightly less funding available for the state highway fund than lawmakers had planned for.

Two years ago, Hegar offered a more gloomy revenue estimate, citing low oil prices and other fiscal issues. But the Texas economy outperformed those expectations, and Hegar revised his estimate in July 2018 to announce that the state was on track to bring in $2.8 billion more than what his office had originally predicted for 2018-19.

That was thanks to rising oil prices and production, and to a thriving economy in which Texans displayed a ravenous appetite for spending. Sales tax dollars are the largest source of funding for the state treasury, making up nearly 60 percent of its income.

"Not only is our economy producing jobs and opportunities, it is generating the revenue we need to meet our growing needs and make historic investments in education, which is key to the future of Texas," Jane Nelson, the chair of the Senate Finance Committee, said in a written statement.

The July announcement had little to do with the upcoming two-year budget cycle that lawmakers will plan for in the legislative session beginning Tuesday. Instead, the extra $2.8 billion will help lawmakers plug some holes in the current two-year budget cycle, for bills the state racked up starting in 2018. Lawmakers this year will pass a backward-looking “supplemental” budget to pay for those bills coming due, which include some costs of Hurricane Harvey recovery and a roughly $2 billion underfunding of the Medicaid program for the poor and disabled.

But in coming years, Texas exports could suffer from a downturn in the global economy and escalating trade disputes, Hegar warned. "Oil prices have dropped sharply since October, financial markets have demonstrated increased volatility, interest rates have been rising and U.S. trade policy remains uncertain," he said. "As the nation's leading export state, the Texas economy in particular is exposed to potential reductions in international trade."

Disclosure: The Center for Public Policy Priorities has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

View original article at The Texas Tribune: 

Additional Info...
Facebook Twitter Email

Other News in Home

BLS

Dallas-Fort Worth Area Employment

Posted on: July 24, 2019

Real Estate Market Remains Steady

Posted on: July 30, 2019

Decatur Eyes Tax Rate Decrease

Posted on: August 2, 2019

August 2019 Texas Economic Outlook

Posted on: August 7, 2019
DecaturISD_RGB_HiRes

Decatur ISD Discusses Budget

Posted on: August 14, 2019

Texas VS Oklahoma Chute Out

Posted on: June 24, 2019

Voltage Coffee Project Expands

Posted on: March 23, 2019
Texas Diverse Economy

The Diverse Economy of Texas

Posted on: March 21, 2019
Help Wanted

Texas Is Where the Jobs Are

Posted on: March 15, 2019
star-telegram-logo

Texas Economic Engine

Posted on: March 7, 2019
devon-energy

DEVON TO SELL LOCAL ASSETS

Posted on: February 21, 2019
tei1901c1

Texas Economic Indicators

Posted on: January 24, 2019
dal-dillon-cook

How Strong is Texas’ Economy?

Posted on: January 11, 2019
BEDCwebsiteImage (1)

Basic Economic Development Course

Posted on: January 7, 2019
house-for-sale

Real estate year closes on a high note

Posted on: December 27, 2018
economy

Sales taxes roll in during 2018

Posted on: December 26, 2018
2046_hero

Outlook for the Texas Economy

Posted on: December 18, 2018
46700048_2256291377934985_9048078929557979136_n

DECATUR IS A GREAT PLACE TO LIVE

Posted on: November 24, 2018

SHOP SMALL

Posted on: November 24, 2018
46512327_2253488038215319_7702221639974387712_n

Getting Rid of Hazardous Materials

Posted on: November 19, 2018
45742679_2247826622114794_8453854458806272000_n

Job Market Increase in Decatur

Posted on: November 9, 2018
45596994_2246612322236224_3250462907816738816_o

Nov. 6th General Election Results

Posted on: November 7, 2018
45491501_2245424832354973_3258397627967864832_n

ELECTION DAY is tomorrow!!

Posted on: November 5, 2018

GET YOUR VOTE ON

Posted on: October 30, 2018
Go Big in Texas

Texas earns three No. 1 rankings:

Posted on: October 2, 2018

Texas Enterprise Fund (TEF)

Posted on: October 4, 2018
TEDC

Upcoming TEDC Webinar

Posted on: October 9, 2018
Wise-County-Texas-Early-Voting_ButtonLogo

Early voting in election set to start.

Posted on: October 19, 2018

Sales tax collections continue roll.

Posted on: October 19, 2018

Wise County Unemployment Rate Down

Posted on: October 23, 2018

Home Sales Slow in Wise County

Posted on: October 25, 2018

Texas Produces Urban Employment Uplift

Posted on: August 22, 2018

Get your Taste of Wise Tickets!

Posted on: August 21, 2018

10 ways to help the flood victims

Posted on: September 4, 2017

Decatur ISD sets tax rate, approves budget

Posted on: September 8, 2017

5 things to know in Texas energy this week

Posted on: September 12, 2017

United Way kicks off fundraising campaign

Posted on: September 14, 2017

PD Recognizes Local Businesses

Posted on: September 18, 2017

Decatur EDC plans land purchase

Posted on: October 2, 2017

Company donates shoes to storm victims

Posted on: October 3, 2017

Ribbon Cutting for Sands Company Today

Posted on: August 29, 2017