Texas will end its current two-year budget cycle in August with a surplus of at least $725 million, not counting billions of federal aid that may go toward replacing state-appropriated funds.
Texas Comptroller Glenn Hegar today revised upward the state’s revenue estimate for the current biennium (2020-2021) and the next biennium (2022-2023). He projected $1.67 billion more revenue in this budget cycle than previously estimated, wiping out a deficit.
Hegar’s projections have repeatedly been revised upward over the past year, from a $4.6 billion deficit forecast last summer to a nearly $1 billion deficit forecast in January, to a $725 million surplus forecast today.
“When we finalized our economic forecast for the January (estimate), COVID case counts and hospitalizations were on the rise, and the rollout of vaccines had just begun,” Hegar said. “Those conditions warranted caution about the near-term economic outlook.”
“Since then, case counts and hospitalizations have plummeted, many restrictions have been lifted and economic activity in the state — and across the country — has accelerated.”
Some of the increased revenue projected is also attributable to upwardly revised estimates of oil and natural gas production tax collections.
For the coming two-year budget cycle, for which the legislature is currently crafting a budget, Hegar increased his projection of available state funds by $3.12 billion, resulting in an estimate of $115.65 billion for general-purpose spending in 2022-23.
Adding federal funds, the total available revenue in the coming budget cycle will be $294 billion, up from the $270.5 billion in Hegar’s January estimate, and about 17% more than the $252 billion appropriated by the legislature in 2019 for the current two-year budget.
