Comptroller Estimates Revenue Available for State Budget

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The day before the Texas Legislature began its 2021 session on January 12, state Comptroller Glenn Hegar released his Biennial Revenue Estimate, which is his projection of how much revenue the state will collect — and have available to spend — over the next two years. Hegar’s estimate reflected a COVID-driven slowdown in tax collections and other state revenue sources, but not as much of a slowdown as he previously projected.

In July, Hegar projected the current state budget cycle would end this August with a shortfall of $4.6 billion. But last week, he projected the shortfall will be a little less than $1 billion. This shortfall is expected to be manageable for state budget-writers because the state has already mandated 5% spending cuts at many state agencies. 

Between September 1, 2021 and August 31, 2023, the state is expected to have $112.5 billion available for general-purpose spending, Hegar estimated. The current two-year budget calls for $118.9 billion in spending, but that number doesn’t take into account the billions of dollars in savings the state has realized over the last 16 months from federal stimulus spending and higher-than-expected property values (which result in less state spending on schools). Hegar also estimated there will be more than $11 billion in additional funding in the state’s Economic Stabilization Fund. Legislators can access some of those dollars with a two-thirds vote.

If the economy continues to rebound and rebuild at the pace projected by the Comptroller, the state may largely avoid the education spending cuts that Texas saw in 2011, during the last major economic slowdown. If the economy doesn't grow at the same pace as projected, the Comptroller could downgrade his revenue estimate before legislators adopt a final state budget in May.

As always, one of the most important decisions legislators will make during their 140-day session is how much state revenue to invest in public education.