The State’s metaphorical piggy bank continues to fill up with surplus dollars from your wallet, says the Texas Comptroller.
Last Friday, Texas Comptroller Glenn Hegar released the Certification Revenue Estimate(CRE) for the fiscal 2024-25 biennium. The CRE revises estimates from the previously issued Biennial Revenue Estimate (BRE), which takes into account legislative actions from session, new economic forecasts, and final revenue numbers from the most recent fiscal year.
This CRE, released after the conclusion of the regular legislative session and two special sessions, serves as the basis for the Comptroller’s certification of the budget and other appropriation bills.
According to the CRE, both the State Highway Fund (SHF) and Economic Stabilization Fund (ESF), commonly known as the “Rainy Day Fund,” will receive $3.06 billion in funding from oil and gas severance taxes in fiscal year 2024. Fiscal year 2025 is expected to bring in an estimated $2.76 billion for each fund from severance taxes.
In 2024, the ESF will receive an additional $2.52 billion from the unencumbered and unobligated 2023 General Revenue Fund ending balance. After all these deposits and other factors, Hegar projects a fiscal 2025 ending Rainy Day Fund balance of roughly $23.77 billion, bringing the fund near its $25 billion cap.
For general revenue, the State is expected to collect roughly $194.5 billion, with a surplus of almost $18.3 billion available, over and above expenditures appropriated by the Legislature.
Despite broad concerns about a recession in the United States next year, the CRE was developed without factoring in a recession. If Texas were subject to such an economic downturn, these numbers would likely be revised, and the State could see fewer tax dollars collected, making the issue of cutting government spending and relieving the overall tax burden on Texans more imperative than ever.
This leaves us with just one question: what is going to happen to the $18 billion of extra money that Texas is going to collect from you, the taxpayer?
If history serves as any indicator, the Legislature will attempt to spend it on corporate welfare and other unnecessary government spending during the next biennium.
But the real answer should be to return it. All of it.
The Legislature should send it back to the taxpayers, whose money it is, in the form of school M&O property tax rate compression and put us on a path to eliminating the School M&O property taxes altogether.
Texans for Fiscal Responsibility relies on the support of private donors across the Lone Star State in order to promote fiscal responsibility and pro-taxpayer government in Texas. Please consider supporting our efforts! Thank you!
Get The Fiscal Note, our free weekly roll-up on all the current events that could impact your wallet. Subscribe today!
