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Lawmakers have $119.1 billion to work with, comptroller says

Biennial revenue estimate up 8.1 percent

January 07, 2019 - 2:58 pm
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AUSTIN (KJCE) -- As lawmakers return to Austin to gavel in the 86th Texas Legislature this week, they'll have a projected increase in state revenues to work with.

Comptroller Glenn Hegar released the state's Biennial Revenue Estimate Monday morning, projecting the state will collect $119.1 billion in revenue available for general-purpose spending over the next two years. That estimate is an 8.1 percent increase over the 2018-19 biennium.

"Despite this projected revenue growth, the Legislature will again face some difficult choices in balancing the budget," Hegar said. "The most pressing and costly budget drivers for the upcoming session include a potentially large boost in education spending to reduce the property tax burden and reform school finance."

The state's "Rainy Day Fund", otherwise known as the Economic Stabilization Fund, currently sits at $12.5 billion and is projected to grow to $15.4 billion barring any legislative appropriations.

Despite the projected revenue increase, Hegar cited a "cloudy" forecast moving forward. "For the 2020-21 biennium, 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," Hegar said. "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. And as the nation’s leading export state, the Texas economy in particular is exposed to potential reductions in international trade. “Because of this heightened uncertainty, this revenue estimate is based on a projection of continued but slowing expansion of the Texas economy."

The drop in oil prices alone could have an impact on the state's tax collections.

Gov. Abbott echoed Hegar's comments. "Even with this strong economic growth, Texans expect their government to live within its means, while funding its priorities," Abbott said in a statement. "This session I look forward to working with the legislature to fulfill these expectations by addressing many key issues, including school finance reform and limiting the growth of property taxes."

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