Texas Gov. Rick Perry wasted no time patting himself on the back Thursday when it was announced that the state expects to bring in $2.6 billion more than it will spend in the current two-year budget cycle.
That’s in addition to at least $8 billion in the rainy-day fund savings account, another $2 billion set aside to help finance water projects and almost $1.4 billion already reserved for highways once voters approve a 2014 constitutional amendment for road funding.
Keep in mind that this is happening as more than two-thirds of the state’s school districts are preparing to go back to court next month for another round of hearings in their lawsuits saying Texas underfunds public schools.
And advocates for more money to ease highway congestion had to work through this year’s five-month legislative session and into the third 30-day special session before they got approval to send the constitutional amendment to voters next year.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
“Texas government budgets like Texas families, limiting spending and saving hard-earned dollars,” Perry said in a news release. He also bragged about passing $1.4 billion in tax cuts.
And, he added, “It’s a shame Washington still hasn’t learned, you can’t tax and spend your way to prosperity.”
Others say Texas lawmakers and political leaders are too tight with the purse strings, unwilling to spend available dollars on schools and roads and other things that deserve support.
Lt. Gov. David Dewhurst, who’s running for re-election against strong conservative opposition, also was quick to claim partial credit for the funding surplus, saying it’s “a strong reflection on our Legislature’s conservative leadership.”
In his own news release, Dewhurst returned to the same theme just three sentences later, touting “our state’s fiscal health and the impact of conservative leadership across the board.”
OK. We get it. Texas is led by fiscal conservatives.
Still, that $2.6 billion surplus is a sign that a few other discrete expenditures are possible.
The revised financial forecast came Thursday from Comptroller Susan Combs. In what’s called the “Certification Revenue Estimate,” she’s required to study the appropriations made by the Legislature in the previous session and certify that there will be enough revenue to pay the bills during the next two years.
Combs is known for keeping her revenue estimates on the low side. Some lawmakers still haven’t forgiven her for low-balling the revenue estimate in 2011, when they cut $5 billion from public schools but it turned out the cuts didn’t have to be so severe.
The report Combs delivered Thursday was good news. Texas is flush with cash, and that’s a good thing.
“Texas has recovered 100 percent of the jobs lost during the recession and added 597,000 beyond the previous peak in 2008.” Combs reported.
She predicted slow, steady expansion: “Adjusted for inflation, Texas’ gross state product is expected to grow by an average of 3.6 percent annually in fiscal 2014 and 2015, slightly exceeding the nation’s expected growth rate of 2.8 percent annually.”
State sales tax revenue is expected to grow by 8.9 percent.
In 2013, Combs said, taxes from retail sales grew 3.7 percent. But the best news that year was 14.3 percent growth in sales tax revenue from the manufacturing sector and 12.5 percent from construction businesses.
The current drilling boom is expected to push oil production and regulation taxes to $6.5 billion for 2014-15, up 27.6 percent from 2012-13.
Natural gas production tax collections, hurt by low gas prices, are expected to be down 1.2 percent to $3 billion.
Unless Perry calls a special legislative session to consider more spending (right after pigs fly, or if the state Supreme Court orders more school funding), lawmakers won’t convene again until January 2015.
There will be plenty of ideas — some of them good ones — for taking advantage of the surplus.