Months after approving the state’s first quarter-trillion-dollar budget, lawmakers got word Thursday that the state’s income forecasts are even better than they expected.
In his latest official revenue estimate, which figures in the costs of legislation passed by lawmakers earlier this year, Comptroller Glenn Hegar said Texas government should end its current two-year budget period with $2.89 billion in cash left over. And it will have $9.35 billion in the Economic Stabilization Fund, better known as the rainy day fund.
In spite of that good news, Hegar expressed some caution in his letter to the governor and legislative leaders: “In fiscal 2019, the Texas economy continued to grow at rates among the highest in the nation. We are projecting continued expansion of the Texas economy in this biennium. The most likely scenario is one of steady expansion at a pace below that of the 2018-19 biennium. Risks to this estimate include ongoing uncertainty about trade and national economic policy, slowing global economic growth, and volatility in energy prices resulting from instability and potential conflict in the Middle East.”
The biggest improvements from Hegar’s last revenue estimate — produced before the legislative session began and revised in May — came from sales taxes, up $429 million; motor vehicle sales and rental taxes, $227 million; franchise taxes, $194 million; and oil production taxes, driven by higher estimates of the price of oil, $399 million. Some of that was offset by lowered estimates for revenue from insurance taxes, $188 million; natural gas production taxes, $211 million; and cigarette and tobacco taxes, $79 million.
Taxes on sales remain the state’s biggest source of general revenue, accounting for 54.2 percent of the total.
Lawmakers wrote and the governor signed a $250 billion budget this year, almost 16 percent bigger than the budget they produced two years ago, and one with significant new spending on public education and an effort to limit increases in property taxes levied by school districts and local governments.