Texas Comptroller Susan Combs today announced an unanticipated revenue rise that will provide $101.4 billion to the incoming 83rd Legislature for general purpose spending over the next two years. As Combs’ revenue estimates establish the financial framework for lawmakers to determine the state’s 2014-15 biennium budget, state policy groups are advocating keeping government limited along with taxes and spending low.
Revenues from sales tax, oil and gas production taxes and motor vehicle sales tax experiencing increases described as “an amazing trajectory” were factors to which the healthy forecast was attributed.
All told, lawmakers will have $101.4 billion available for general-purpose spending over the next two years, she said. That includes the $8.8 billion ending balance in August and the net revenue of $92.6 billion in the coming cycle. They face about $7 billion in patchwork desired for the current budget, including a $4.7 billion Medicaid IOU they left unpaid as they wrote the budget last session.
Though some reminded of Combs’ inaccurate estimates for the 2011 legislative session, she said the outlook for both the economy and state revenue is for continuing expansion as the fast growth of the economic recovery gives way to sustainable, moderate growth. Regarding the 2011 estimates, Combs responded that no one in Washington or at the Federal Reserve Bank forecast the recent recession’s severity.
Texans for a Conservative Budget, a coalition comprising the Texas Public Policy Foundation, Texans for Fiscal Responsibility, Grassroots America-We The People, Americans for Prosperity-Texas and Americans for Tax Reform, issued a statement calling today’s biennial revenue estimate “further validation of the Texas Model of limited government, low taxes and spending, and a fair legal system.” The group says Texas’ principled approach to governance has created an ideal environment for the state’s economy to thrive and prosper, which has spurred strong and broad-based revenue growth.
The group further stated:
The strong growth in state revenues confirmed today eliminates any argument for tapping the state’s rainy day fund to cover unpaid bills in the current budget or ongoing obligations in the 2014-15 budget. There will be enough money in the general fund to cover the Medicaid shortfall and undo many of the delayed payments and tax accelerations used to balance the budget last session.
The positive revenue and economic outlook sets the stage for the Legislature to eliminate the margin tax, which is one of the few deterrents to private-sector investment and job creation in Texas.
Along with discussing her revenue estimate numbers, Combs reportedly warned that obstacles and challenging conditions remain and could impact Texas’ budget and economy. Reminding how federal government gridlock continues, she also mentioned Europe’s economic and financial troubles along with China’s slowing economy as potential influences as the state moves forward.
Texans for a Conservative Budget share these concerns and caution that “state lawmakers must take care not to make Texas a victim of its own success.” “The path to robust revenue growth runs through strong private sector activity and investment, not big government,” the group says. “Keeping the cost of government low and the focus on basic services allows for the tax burden to remain light, which provides a more reliable revenue stream to support those basic services.”
The regular session of the 83rd Texas Legislature will run 140 days, Jan. 8 through May 27.