Texas Comptroller Glenn Hegar recently announced his office will send cities, counties, transit systems, and special goal taxing districts a total of $616.2 million in local sales tax allocations for October.
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The Texas comptroller downgraded the state’s projected fortunes Tuesday, saying he expects the state to have about $5.8 billion less in certain sources of revenue than he previously estimated because of dampened oil and gas prices.
When lawmakers passed the budget and tax cuts for business and homeowners in May, they appeared to leave $17.5 billion unspent – $11.1 billion of it in the rainy day fund. Hegar said he had been prepared to make such a revision if needed but that sales tax revenue for the first half of the year continued to show impressive growth.
The expected price of oil was around $60 per barrel on average, whereas lately it has been nearer to $45 per barrel.
In his first certified revenue estimate as comptroller, Hegar predicted the state economy would grow more slowly than in it has in years. Crude oil is now trading at $46.58.
House Speaker Rep. Joe Straus, R-San Antonio, put out a statement saying that conservative budgeting paid off.
Hegar lowered his estimate of state revenues in the overall state budget by $2.6 billion, which still leaves plenty of breathing room.
The estimate released Tuesday takes into account policies adopted during the last legislative session and changing economic conditions that could affect the amount of revenue the state collects.
The state projects the revenue available for spending will fall to $110.4 billion in 2016 and 2017, down from a prior estimate of $113 billion in its previous biennial estimate that projects how much revenue will be available in the next two-year budget cycle. “Stronger growth in collections from the retail trade, restaurant, services and construction sectors offset declines from oil and gas-related industries”.
Hegar says Texas’ diversified economy helps in making it more resilient.
The Rainy Day Fund, which is fed largely by oil production taxes, is now expected to end the biennium with a $10.4 billion balance.
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Next month, voters will decide on Proposition 7, a constitutional amendment that would use part of the state’s general sales and use tax and motor vehicle sales tax for the State Highway Fund. But it wouldn’t have an effect on Tuesday’s projections.
