News Article | October 27, 2023
Comptroller Projects $18.3 Billion Surplus for 2024-25 Biennium
Comptroller Glenn Hegar estimates the state will end the 2024-25 biennium with an $18.3 billion balance in available revenue. This balance will carry over to the next biennial budget cycle and will likely be used for 2024-25 spending demands that exceed appropriations, such as a recurring shortfall in state Medicaid costs. The $18.3 billion is net of the two appropriations bills enacted by the 88th Legislature during the regular session and the cost of appropriations contingent upon voter approval of constitutional amendments on the Nov. 7 ballot.
Earlier this month, Hegar announced the Certification Revenue Estimate (CRE), an update of the state's revenue outlook for the 2024-25 biennium. By law, Hegar must provide the estimate used to certify the General Appropriations Act, House Bill 1, and other appropriation bills, such as Senate Bill 30, enacted by the 88th Legislature. At present, the CRE also serves as an estimate of available revenue for the third special session of the 88th Legislature as required by the Texas Constitution. The increase in available revenue – up from $188.2 billion in May to $194.6 billion – is due mainly to actual, final 2022-23 receipts above predicted amounts. Hegar's updated economic outlook assumes Texas will not experience a recession, but "revenue is estimated conservatively for the 2024-25 biennium."
Although the $18.3 billion is available for general purpose spending, budget writers are constrained by constitutional and statutory spending caps. The CRE's updated fund balance increases the amount the Legislature can spend without voting to exceed the current spending cap – from $1.6 billion to $6 billion.
For more on how much the Legislature can spend under the three spending limits based on the Comptroller's updated revenue estimate, see the Legislative Budget Board's updated estimates of the Remaining General Revenue Budget Authority. The controlling cap is the lowest of the three, currently the tax spending limit.
Hegar also announced that the balance in the Economic Stabilization Fund, or "rainy day" fund, is projected to reach $23.8 billion by the end of the 2024-25 biennium.
For more information about this article, please contact Zelma Smith.