Texas Comptroller Susan Combs announced today that lawmakers should have $72.2 billion in general revenue available to construct a budget for the next two years. Below is a portion of the statement from Combs (bolded for emphasis):
For 2012-13, the state can expect to have $72.2 billion in funds available for general-purpose spending. This represents a 2.9 percent decrease from the corresponding amount of funds available for 2010-11.
General Revenue-related tax and fee collections in 2012-13 are estimated to reach $77.3 billion, with tax revenues accounting for 87 percent of the total. Approximately 64 percent of state tax revenue will come from the sales tax. Other significant sources of General Revenue include motor vehicle sales and rental taxes, the franchise tax, the oil and natural gas production taxes, insurance taxes, and lottery proceeds. Reserved from $77.3 billion is $866 million representing oil and natural revenues that will be deposited to the Economic Stabilization (Rainy Day) Fund.
Offsetting the anticipated revenue collections of $77.3 billion for 2012-13 is the ending 2010-11 General Revenue-related balance, projected to be a negative $4.3 billion. This projected ending balance is a reflection of worse-than-expected revenue collections due to the recession – notably, the all-important sales tax which was battered by rapidly rising unemployment and contracting state and national economies.
In addition to the General Revenue-related funds, the state stands to collect $100.5 billion in federal receipts and other revenues dedicated for specific purposes and therefore unavailable for general-purpose spending. State revenue collections from all sources and for all purposes should total $177.8 billion.
The state’s fiscal condition, severely impacted by declining state revenues, has been strengthened, however, by recent budgeting decisions by the Texas Legislature. Dollars flowing rapidly into the state’s Economic Stabilization Fund associated with oil and natural gas tax revenues during the mid- and late- 2000s were not spent but retained in the Fund. In 2007, the Legislature moved $3 billion from the General Revenue Fund into the Property Tax Relief Fund and, more recently, state leadership has instructed agencies to trim their budgets in response to economic conditions and the effect on state finances.
With respect to the recent recession, the State of Texas is emerging from what may have been the worst economic downturn since the end of World War II. While the economy and, subsequently, revenue collections, declined markedly, the state has fared somewhat better than other states during the recession.
State payroll employment, which contracted by approximately four percent, held up better than national employment which declined by over six percent; the state unemployment rate, currently 8.2 percent, has spiked above a pre-recession low of 4.3 percent, but has stayed well below the current national rate of 9.8 percent. The state, while experiencing falling home sales and increased levels of foreclosures, avoided severe declines in property values.
This revenue estimate is based on my latest economic forecast, which indicates that the Texas economy will grow over the next two years, but at a modest pace.
Comptroller Combs closes her remarks noting, “the national and Texas economies appear to have turned the corner, however a strong period of growth has yet to begin.”
Under state law, the Comptroller’s office issues the Biennial Revenue Estimate (BRE) before the beginning of each session of the Texas Legislature. The BRE is a formal estimate of the funds likely to be available from taxes and other revenue sources over the next two years, in effect telling the Legislature how much money it can spend over the state’s two-year budget cycle.
Read the complete BRE: http://www.window.state.tx.us/taxbud/bre2012/96-402_BRE_2012-13.pdf