In a Texas Tribune Event moderated by reporter Karen Brooks Harper Texas Comptroller Glenn Hegar discussed the state’s biennial revenue estimate, how the state is enjoying a surplus amid economic fears nationally and where the state should consider allocating its extra money. An archive of the conversation can be found here.
This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
Discussion is Moderated by Karen Brooks Harper
Texas Comptroller Glenn Hegar
Q: Brooks – Asks to overview the BRE
- Hegar – All funds in total over $340b; GR discretionary dollars $189b
- Historical cash carry over balance will be almost $33b at the end of this session
- Lawmakers cannot spend all this money as there are limits; will be priorities, but now is the time to make prudent decisions to set aside dollars for a particular purpose for upcoming bienniums
Q: How would they set that aside?
- Is a constitutional spending limit for tax revenues and a statutory spending limit for consolidated revenues
Q: Speak to economic uncertainty?
- Constantly monitoring the state/global throughout the session; impacts like China opening up their economy, Russian invasion of Ukraine, and cost of oil/gas are all big factors
- Last three years have had a lot of once in a lifetime events
Q: What are your priorities?
- I am not a policy maker, but it my job to provide information
- Need to continue to invest in road, water, and broadband infrastructure
- Are 7m people that have no broadband connectivity in their homes
- Have had historic inflation and lower income people have had to make difficult choices
- Need to raise salaries for government employees
Q: Cannot depend on a huge jump in the future?
- Correct, also depends on the decisions they make
- Part of the new number $189b all funds includes the $32.7b cash carry over
- Texas will have more modest growth as we will enter into a short-term recession
- Only give times in the last 30 years where there was a double digit tax increase; last year was record breaking
- Even with modest growth, is still a significant part of the budget
Q: Have to spend all the extra $32.7b?
- No, will be a supplemental probably for Medicaid and a few other expenses
- Are federal dollars that are unappropriated
Q: How talk to Texans who are hurting due to inflation?
- Need to recognize a portion of this is due to inflation and prudently make decisions
Q: Talk about the ESF
- Have over $13b in the ESF; in natural gas and oil severance taxes last year had over $10b in collections
- Half of unincumbered GR dollars gets transferred to the ESF; potential transfer of $5.7b which has never happened before and might hit the ESF cap
Q: Do not budget over the oil and gas severance taxes?
- Correct, is too volatile
Q: Have been deficits in the past that have caused tension, so will there be less tension this year?
- Is going to be interesting; it is easier in a budgeting cycle when you have no money
- Need to prioritize things down the road as we are entering into a mild recession
Q: Talk about the mild recession?
- If anything changes globally or nationally then it could have a degree of impact
- Will still see inflation rising by 2.7% this year; notes Texas will weather things better than most states
Q: Any part of the process does your political affiliation come into the process?
- All of this work is based on data; comes through on my priorities such as border security
- Have conservative, cautious, budgeting practices
Q: Limitations of ESF or GR spending?
- Only limitation of ESF is a 2/3rds vote and is typically used for disaster or for economic shortfalls
- GR limitations 2/3rds vote are under constitutional spending limit and statutory spending limit
Q: Percentage of the budget is spoken for?
- About 90% of the budget is spoken for; biggest players are education and health
Questions & Answers:
Q: Should be some limit on economic development expenditures and 313 program?
- 313 program has expired and seems to be consensus that if it is re-vamped will be something different
- Enterprise fund dollars are appropriated in the budget and the legislature sets those up how they want to
Q: How would education funding by enrollment verses attendance impact your job? Know there have been a lot of discussions concerning this
- TEA is in charge of making those assumptions, but the reason we do ADA is to encourage students in the classroom
- Would have to get more information from TEA to answer that question
Q: Know you have infrastructure priorities; can we continue to grow if we do not continue to invest in infrastructure?
- With the accelerated growth over the last decade and continued growth; need infrastructure investment in roads, water, broadband, etc.
- Are some regions that are better at conservation that others; have to do that better
Q: Other than infrastructure what are other long-term liabilities?
- Have a focus on infrastructure since we have focused on deferred maintenance on state facilities and pensions (ERS and TRS) in the past
Q: Is a way the state could give low interest loans for state employees?
- Think the most prudent thing to do would be targeted salary adjustments