January 12, 2017
By Paul Emerson
The day before the 85th Legislature convened, Comptroller Glenn Hegar released the latest Biennial Revenue Estimate (BRE), which shows that the state is projected to have $104.9 billion available for general purpose spending in the 2018-19 biennium. This reflects a 2.7 percent (or $2.8 billion) decrease from the current two-year budget cycle (2016-17). Not included in the $104.9 billion is revenue allocated to the State Highway Fund as a result of a constitutional amendment (Proposition 7) passed in 2015 by voters to dedicate up to $5 billion in biennial sales tax revenue to the State Highway Fund, beginning in fiscal years 2018-19. These funds can be used to address important transportation infrastructure needs in the state.
General-related tax and fee collections are projected to total $106.5 billion for the 2018-19 budget period. Such collections include the state sales, motor fuel and motor vehicle taxes — to name only a few.
The state’s largest tax revenue source is the sales tax, which accounts for more than half its general revenue. The tax is expected to generate roughly $62 billion in fiscal years 2018-19, which is a $5.1 billion increase from the current biennium.
Other budget projections and key factors include:
- Federal funds are projected to be $74.9 billion, while other fees and revenues are projected to be $43.1 billion. This will bring total state revenue to $224.8 billion for fiscal years 2018-19, which is $4 billion more than the current biennium.
- The Economic Stabilization Fund (also known as the Rainy Day Fund) is expected to total $11.9 billion, absent any appropriations by the Legislature. This fund is expected to remain below its constitutional limit of an estimated $16.9 billion.
- The unemployment rate was 4.5 percent in fiscal year 2016, and is expected to average 4.5 percent over the next three years.
- The state also expects to see an annual job growth of 200,000 in fiscal year 2017, 227,000 in fiscal year 2018 and 214,000 in fiscal year 2019.
Additional information is available in the Comptroller’s Biennial Revenue Estimate report.
For more information, contact Paul Emerson
, TAC state financial analyst, at (800) 456-5974.