Comptroller Announces Revised State Revenue Estimate

County officials should prepare for a difficult legislative session as the state grapples with a looming budget crisis. With so many unknowns such as the evolving COVID-19 pandemic, declining sales tax revenue and doubts regarding the future of oil and gas prices, budget writers will have their hands full.

July 27, 2020

Legislative News

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County officials should prepare for a difficult legislative session as the state grapples with a looming budget crisis. With so many unknowns such as the evolving COVID-19 pandemic, declining sales tax revenue and doubts regarding the future of oil and gas prices, budget writers will have their hands full. The state has less to spend than previously expected.

Comptroller Glenn Hegar announced in a meeting last week with the Legislative Budget Board that the amount of general revenue for the state's current two-year budget will be $110.2 billion. The projection, for the current FY 2020-21 budget cycle, is $11.6 billion less than the $121.8 billion estimated last fall, and leaves the state looking at a $4.6 billion deficit when the current biennium ends in August 2021. This is instead of the $2.9 billion surplus Hegar estimated before the pandemic began.

"We’re assuming the state will effectively manage the outbreak and that infection rates won’t overwhelm our health care system,” Hegar said. “This estimate also assumes that restrictions on businesses and individuals will be lifted before the end of this calendar year and that economic activity will strengthen but not return to pre-pandemic levels by the end of this biennium.”

State leadership recently requested most state agencies and higher education institutions to reduce spending by 5% of FY 2020-21 general revenue appropriations. The revised estimate does not include potential savings from this request or federal financial assistance.

It's too soon to tell what the state budget will look like for the next biennium. However, some legislators are already linking it to the 2011 budget crisis, from which the effect of drastic budget cuts are still being felt.

Hegar will provide a revenue estimate for the FY 2022-23 budget cycle before the Legislature convenes in January. View the comptroller’s full press release for more information, or email Paul Sugg.