Texas comptroller says budget isn’t as dire as anticipated, but revenue remains down
The outlook for Texas’ two-year budget isn’t as dire as initially anticipated, Texas Comptroller Glenn Hegar told lawmakers Monday.
Still, revenue remains down amid the coronavirus pandemic.
“All told, revenue collections have outperformed what we expected when we released our revised estimate in July,” Hegar said, testifying virtually before the Legislative Budget Board. “Nonetheless, revenues remain down significantly relative to a year ago, and well below what we expected to collect when the Legislature wrapped up your work on the budget in 2019.”
Sources of revenue such as hotel occupancy taxes and alcohol beverage taxes still show steep declines compared to a year ago, Hegar said. Revenue from oil and natural gas production taxes has also been lower.
Hegar in July projected Texas will end its two-year budget with $11.57 billion less in general revenue funds than previously estimated, creating a $4.58 billion shortfall.
Sales tax collections have been the “biggest bright spot” so far, providing the largest sources of tax revenue, Hegar said. In July, Texas’ sale tax revenue totaled $2.98 billion, up 4.3% from the previous year.
“In recent months ... sporting goods stores, grocery and liquor stores and building goods and home improvement outlets have showed gains, while other outlets have seen sharp decline,” Hegar said, adding the largest gains have come from online retail.
The board, made up of members of the House and Senate and chaired by Lt. Gov. Dan Patrick and Speaker Dennis Bonnen, R-Angleton, met in Austin. Sheets of Plexiglas separated the lawmakers as they listened to Hegar’s remarks and testimony from the board’s director, Jerry McGinty.
Lawmakers will set the upcoming budget during the legislative session, which convenes Jan. 12.
Hegar acknowledged that crafting the 2022-23 budget will be a “difficult exercise.”
“I know how difficult crafting a budget can be even in the best of times, and my office obviously stands ready to assist you as you work through the next legislative session,” Hegar said.
