AUSTIN (Nexstar) — The Texas state government has money in the bank.
Texas lawmakers have tax revenue to address expensive policy proposals when they begin their legislative session Tuesday. Comptroller Glenn Hegar released his biannual report on Monday showing how much money the state budget is predicted to collect.
In short, a growing state economy is predicted to collect more taxes than normal.
“The economy has proved us wrong,” Hegar said at a press conference explaining the report. “There has been robust sales tax collection.”
During his release of the state’s biennial revenue estimate, Comptroller Hegar reported Texas lawmakers will have $119.1 billion to spend on state needs. That number is an 8.1 percent increase from the tight-fisted budget two years ago.
However, he told lawmakers the booming state economy likely won’t be as rosy in the years ahead.
“While we project continued growth in the coming biennium,” Comptroller Hegar said , “I believe that recent economic conditions warrant a more cautious revenue outlook for this coming biennium.”
Hegar cited several reasons for a “cloudy” revenue forecast, including an uncertain global economy, rising interest rates and the steady decline of oil prices over the last month. In December, oil prices dropped below $50 per barrel.
“Which will affect not just severance tax collections, but other taxes as well, like the state’s sales and franchise taxes,” he said.
The Economic Stabilization Fund — or “Rainy Day Fund” — currently has $12.5 billion and is expected to be $15.4 billion at the end of this next budget cycle — a historical high.
The money will be needed when lawmakers address multi-billion dollar items like reconstruction after Hurricane Harvey, rising healthcare costs and revamping the state’s old and tattered school finance system.
“Even with this strong economic growth, Texans expect their government to live within its means, while funding its priorities,” Gov. Greg Abbott released in a statement. “This session I look forward to working with the legislature to fulfill these expectations by addressing many key issues, including school finance reform and limiting the growth of property taxes.”
Lt. Gov. Dan Patrick said Senate projections matched Hegar’s biennial revenue estimate.
“We face a broad range of fiscal challenges in the eighty-sixth legislative session and we are committed to property tax reform, increasing teacher pay and school finance reform,” he said. “We are confident we can accomplish these goals.”
Money for available for schools
School leaders in Austin and across the state are looking for financial help from the state of Texas. To them, Monday’s revenue estimate comes as good news.
Del Valle Pre-K teacher Michelle Cardenas says this can can’t be kicked much longer. After 16 years of spending her own money on shelves, tables, and school supplies, she just learned lawmakers could have $15 billion in the bank.
“We see them having the money. It’s just where does the money go,” Cardenas said.
She says after years of picking up the tab personally, experienced educators leave.
“Tons of teachers, we’ve lost,” she said, “In fact one of my good friends just moved to Kentucky.”
“There is enough already in the Rainy Day Fund to maintain what we’re doing for schools and healthcare, possibly to improve what the state is doing with education,” said Eva DeLuna Castro, a policy analyst from the Center for Public Policy Priorities.