Texas Comptroller Glenn Hegar released the state’s Biennial Revenue Estimate (BRE) earlier this week which showed the state is projected to have approximately $104.9 billion in revenue available for general-purpose spending during the 2018-2019 biennium.
According to a press release on the comptrollers website, this represents a 2.7 percent decrease from the amounts available for the 2016-17 biennium.
The decline is not due to a projected drop in total revenue collections from the 2016-17 biennium to the 2018-19 biennium, according to the release.
Hegar is projecting overall revenue growth from the current biennium to the next.
A significantly lower beginning balance of $1.5 billion, however, offsets such growth, per the release.
In addition, a 2015 voter-approved constitutional provision dedicates up to $5 billion in biennial sales tax revenue to the State Highway Fund (SHF) starting in the 2018-19 biennium to address important transportation infrastructure needs.
“Ongoing weakness in activity related to oil and natural gas has been a drag on state economic growth and led to lagging revenue collections in 2016. Still, the diversity of the Texas economy has allowed for slow but continued economic expansion and steady growth in employment, which we expect to continue over the coming biennium. Texas stands in contrast to other states with large energy industries, many of which have suffered declines in employment and economic output.”
Glenn Hegar, state comptroller
Sales tax collections make up the state’s single largest source of General Revenue-Related (GR-R) revenues. Ultimately, there is $104.9 billion available to the Legislature for general-purpose spending in the next biennium.
Following a strong 5.9 percent increase in real gross state product in the 2015 fiscal year, the Texas economy is estimated to have grown by only 0.2 percent in FY 2016.
In 2017, the Texas economy is projected to grow by 2.5 percent.
That growth rate should increase slightly to 3.0 percent in fiscal 2018 and 3.1 percent in fiscal 2019.
Employment growth is expected to be 1.9 percent in fiscal 2018 and 1.7 percent in fiscal 2019, while the state’s unemployment rate is expected to remain relatively unchanged at 4.5 percent in both fiscal 2018 and 2019.