Texas Revenue Forecast
by: Laurie Johnson, January 8, 2007 5:01:00 am
This week, legislators start the business of shaping state law for the next two years. The 80th legislative session will have $82.5 billion in general revenue to work with. Newly elected State Comptroller Susan Combs released the projections, saying it's a solid, conservative estimate.
"$14.3 billion of that is new money."
That money comes from appropriations that weren't spent during the last biennium, along with new monies coming in from sales and franchise tax revenues. There's also a $7 billion surplus for the '08-'09 biennium. Just four years ago, the surplus was only $88 million dollars, so that represents a huge leap in the available resources. But Combs says that doesn't mean the outlook is rosy.
"The economy, like the rest of the country, is beginning to cool off. It was great in '06 and pretty good in '07, but you've got a cooling housing market, you've got oil and gas prices which are stabilizing and kind of moving a little bit downward and we do expect a reduced growth in consumer spending."
Sales tax is the state's largest tax revenue source. The downward trend of consumer spending means fewer dollars coming in from that sector. In fact, Combs says sales tax revenue grew by 12 percent in 2006, but is only expected to grow by four percent in 2008. As much as $13.5 billion will be set aside for property tax relief. Another $2 billion will go directly into the Rainy Day Fund. And Combs suggests lawmakers need to be prudent with the spending, because although they have a significant surplus to work with, they can on count decreasing revenue in the next few years.
"So while we've got plenty of cash right now, if I were you know running a business, looking forward I would be putting some pretty sizeable amounts of money in the Rainy Day Fund and the legislators may wish to add to that because they're looking out in the out years and the biennium after this coming one and saying we've got to be sure we have plenty of money."
Outside analysts say the budget includes enough money to cover current programs, provide property tax relief and still have some left over for the future. Laurie Johnson, Houston Public Radio News.