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Texas budget forecast better than expected going into Texas Legislature, comptroller says

Lawmakers will have more to spend than previously projected but will still have to make up for a nearly $1 billion deficit.

AUSTIN, Texas — Texas lawmakers head back to work Tuesday, and the state comptroller says they will have $112.5 billion to spend when they draw up the next two-year budget during this year's legislative session. 

Texas Comptroller Glenn Hegar released his biennial revenue estimate (BRE) Monday morning.

The amount for the 2022-23 biennium is down 0.4% from the current budget, a decline that Hegar says is a direct result of the COVID-19 pandemic, which caused revenue collections to fall well short of what was expected when the Texas Legislature approved the 2020-21 budget.

But the decrease isn't as bad as what Hegar estimated over the summer. In July, he projected that the general revenue available for the two-year budget was expected to be roughly $11.5 billion less than originally expected, putting Texas on track to end the biennium with a deficit of $4.6 billion. 

As it stands now, lawmakers will have to make up for a nearly $1 billion deficit.

Although the forecast is better, Hegar says the state's economic future still remains "clouded in uncertainty" and the numbers could change. 

"The ultimate path of the pandemic and the behavior of consumers and businesses during a resurgence are difficult to gauge. It’s also unclear how they’ll respond once the pandemic is fully under control. As a result, there is a wide range of possible outcomes for state revenue through the end of fiscal 2023, with the possibility of revenue falling short of this forecast but also a chance revenue could exceed it, perhaps substantially," he said.

Hegar said the Legislature will face difficult choices to balance the budget, saying that while savings from agency spending cuts and federal funding could help erase the projected shortfall for this biennium, a substantial supplemental appropriations bill could increase it, reducing available revenue for the next biennium.

Texas Lt. Gov. Dan Patrick responded to Hegar's BRE, calling it "welcome news." 

"We believe that with a continuing healthy economy, a growing Economic Stabilization Fund and federal COVID-19 relief, we will be able to move forward on our budget priorities this session and balance the budget by session's end, as required by the Constitution. We will:

  • Continue to mitigate the impact of the pandemic while positioning the Texas economy to come back stronger than ever
  • Maintain the historic funding increases in education from last session as well as teacher pay increases
  • Maintain the $9 billion shift in franchise tax, homestead exemptions and school property taxes enacted since 2015
  • Maintain our commitment to meet the growing cost of health care
  • Maintain our commitment to border security, transportation and infrastructure."

The Texas Taxpayers & Research Association released the following statement in response to Hegar's BRE:

"Comptroller Hegar’s revenue estimate this morning offers both bad and good news. The pandemic and the associated impact on state revenues means Texas faces budget challenges at the very time Texans may need government help more than ever; however, the numbers are manageable. The $1 billion deficit is substantially less than the $4.3 billion lawmakers faced in 2011, and the $11.6 billion balance in the Economic Stabilization Fund gives budget writers a bigger cushion than the $9.4 billion in 2011. Texas’ current budget challenges can be addressed without raising taxes at a time when Texans can least afford it."

WATCH: Here's how the 87th Texas Legislative Session bills filed so far compare to years past


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