AUSTIN (Talk1370.com) -- When the 88th Texas Legislature convenes in January 2023, lawmakers will have a few extra billion dollars to spend for the next state budget.
A new estimate released Thursday by Texas Comptroller Glenn Hegar says the state will end up with a projected fiscal 2023 ending balance of $26.95 billion - nearly $15 billion more than Hegar's last projection in November. That's in addition to the $13.6 billion in the so-called "rainy day fund".
"This revised estimate includes a net decrease in projected GR-R spending of $1.5 billion, yet is mostly driven by tax revenues that rebounded strongly in recent months after being suppressed by the pandemic in the previous biennium," Hegar said in a release. "In fact, many tax revenue categories reached their highest collections on record, and this fiscal year has experienced the largest one-year increase in total tax collection, as compared with the prior fiscal year, in Texas history."
Hegar highlighted sales taxes, which have seen monthly collections for each of the last 15 months exceed $3 billion, averaging $3.5 billion.
"Severance taxes performed extremely well due to elevated oil and gas prices caused by energy market volatility. This is due in part to a strong global economic recovery coupled with the war in Ukraine and a period of limited investment in fossil fuel production and refining capacity. It is important to realize that inflation is a significant contributing factor as to why we have seen record tax collections in sales tax and other revenues over the last year."
Despite the optimism in the numbers, Hegar cautions that the economic picture could change based on real-world conditions. "High inflation, geopolitical conflicts and renewed COVID restrictions among our global trading partners could impair economic activity. While this is not a recession forecast and continued economic growth is expected, the rate of economic growth is anticipated to slow. Revenue growth in fiscal 2023 is estimated conservatively in view of the degree of uncertainty and heightened risk of a recession."
