The 87th Texas Legislative session is close to its May 31st deadline, meaning a final vote on the biennial budget is near. The Texas House passed its version of SB 1 on April 22nd. Conferees were appointed April 27th and the negotiations between the House and Senate have continued since then.
Earlier this session, Texas Comptroller Glenn Hegar revised the 2020-2021 Biennial Revenue Estimate (BRE) and increased the spending to be $113.8 billion and the General Revenue -Related (GR-R) funds to be $725 million. When Hegar originally released the BRE in January, there was a forecasted deficit of $1.67 billion in revenue.
As a result of the increased ending balance and the revised projections of revenue collections for the 2022-2023 biennium, there will be an estimated $115.65 billion accessible for general-purpose spending in 2022-2023. That means about a $3.2 billion increase from January's estimate of available GR funding for the upcoming budget cycle.
According to Hegar, the revisions are based on changes in estimated revenue collections and the updated Legislative Budget Board estimates of the state obligation for Foundation School Program (FSP) funding.
Hegar had initially forecast the conservative reduction in available funds as a result of the state’s continued recovery from the COVID response. The revised estimate reflects a significant increase in consumer activity as the COVID-19 vaccine rollout had reached more than 20 million Texans with at least one vaccine injection so far. Even with the positive increase in forecasted funding available to the state, Hegar remained cautious about the economy’s continuing stability.
“This updated BRE assumes a continued economic growth through the next biennium, but uncertainty remains about the ultimate course of the economy and thus state revenue,” explained Hegar.
Though cautious, the Comptroller admitted Texas is faring better than most of the country.
“Texas remains well-positioned to recover from the COVID outbreak and return to its norm of economic growth in excess of the national rate — if we haven’t already,” stated Hager.
The revised estimate delivers an additional bonus to fiscal conservatives who were successful in delivering a draft budget that is balanced and remains well below all four Constitutional spending limits.
The new Revised BRE is available online to look at on the Comptroller’s Website at: https://comptroller.texas.gov/about/media-center/media-kit/87th-lege/