Texas Comptroller Glenn Hegar presented the Biennial Revenue Estimate on Monday, informing legislators about the amount of state revenue that will be available for the upcoming biennium (the 2018-19 biennium begins on Sept. 1, 2017) and the revised estimate of funds available for the remainder of the current biennium.
Going in to the 2015 legislative session, lawmakers were looking at a surplus of $7.3 billion; that figure is reduced to $1.5 billion for the 2017 session. Overall available revenue dropped from $113 billion two years ago to just under $105 billion now.
Though these figures do not represent a deficit, which is of course good news, the lower levels of available revenue combined with always-increasing spending needs mean that once again, legislators will be looking at a session of belt-tightening.
The key culprit in the revenue decrease is lower-than-anticipated sales tax collections, though Hegar noted that in the long term the Texas economy still compares favorably to the US and other states, particularly other oil/gas-reliant states. Texas has developed a more diversified economy that is helping the state avoid a major slump as oil and gas production has slowed and prices have dropped. Another factor in the revenue decrease is the dedication of close to $5 billion in sales tax revenues to highways, as approved by voters in 2015.
A key budget leader in the House, Rep. Drew Darby, said that the revenue available is $5-6 billion less than the amount needed just to continue current services throughout the budget, due to rising costs and growth increases. What this means for public education remains to be seen, but advocates for expensive items such as increases in overall education funding or assistance with employee health insurance will be fighting an uphill battle.