Texas Comptroller Glenn Hegar today revised the Biennial Revenue Estimate (BRE) and now projects 2020-21 revenue available for general-purpose spending to be $113.88 billion and the ending balance in General Revenue-Related (GR-R) funds to be $725 million, an increase of $1.67 billion from the negative balance projected in the January 2021 BRE.
The increased ending balance, combined with upwardly revised projections of revenue collections for the 2022-23 biennium, results in an estimate of $115.65 billion available for general-purpose spending in 2022-23, an increase of $3.12 billion from the January BRE.
In a May 3 letter to state leadership, Hegar said the revisions are based on changes in estimated revenue collections and updated Legislative Budget Board estimates of the state obligation for Foundation School Program (FSP) funding.
This estimate does not account for any appropriations made by the 87th Legislature, and the projected ending balance does not account for any savings from state agency budget reductions, replacement of eligible GR-R appropriations with federal relief funds or reductions in non-FSP appropriations made in House Bill 2.
“When we finalized our economic forecast for the January BRE, COVID case counts and hospitalizations were on the rise, and the rollout of vaccines had just begun,” Hegar said. “Those conditions warranted caution about the near-term economic outlook. Since then, case counts and hospitalizations have plummeted, many restrictions have been lifted and economic activity in the state — and across the country — has accelerated.”
Some of the increased revenue projected is attributable to upwardly revised estimates of oil and natural gas production tax collections. Consequently, the Comptroller’s office is expected to transfer $1.26 billion each to the State Highway and Economic Stabilization funds in fiscal 2022 and another $1.67 billion each in fiscal 2023. Not counting any appropriations made from the Economic Stabilization Fund by the 87th Legislature, Hegar said he now expects its balance to be $12.12 billion at the end of the 2022-23 biennium.
“Our revised revenue forecast assumes continued economic growth through the next biennium, but uncertainty remains about the ultimate course of the economy and thus state revenue,” Hegar said. “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.”
The revised Biennial Revenue Estimate and visuals from today’s press conference are available on the Comptroller’s website.