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Texas Comptroller releases revenue estimate, economic outlook is 'cautiously optimistic'

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Posted at 3:25 PM, Jul 07, 2021
and last updated 2021-07-07 16:59:58-04

WACO, TX — Texas Comptroller Glenn Hegar released a revenue estimate Wednesday, July 7, projecting a Fiscal 2022-23 ending balance of $7.85 billion.

This is over $2 billion higher than what was estimated for fiscal 2021's ending balance in GR-R funds.

“The Texas economy rebounded strongly during the spring as vaccination rates increased and the economy opened more fully, and we remain optimistic about growth in the near term as the state’s economy continues to return to pre-pandemic patterns,” Hegar said.

Hegar projects the revenue for 2022-23 for general-purpose spending to be $123.02 billion. The estimate is based on surging revenue collections, savings due to budget redactions from the recent regular session of the 87th Legislature, and the assistance of federal relief funds, according to Hegar.

“There remain reasons to expect strong revenue collections in the coming months," Hegar said. "We have seen exceptionally strong sales tax collections despite remittances from oil- and gas-related industry sectors remaining significantly below pre-pandemic levels. An increase in oil field activity resulting from the recent rise in oil prices could support continued sales tax growth. And personal savings remain elevated, providing potential support for continued strength in consumer spending."

$1.4 billion each is expected to be transferred to the State Highway Fund and Economic Stabilization Fund in fiscal 2022; and then another $1.88 billion to each in fiscal 2023.

Hegar said the balance is expected to be at $12 billion at the end of the 2022-23 biennium. This is after accounting for appropriations made from the Economic Stabilization Fund by the 87th Legislature.

Hegar's projection of 2020-21 revenue available for general-purpose spending is $116.13 billion, and that fiscal 2021 will have an ending balance in GR-R funds of $5.01 billion.

“Rising case counts tied to the Delta or other coronavirus variants in Texas, the U.S. or elsewhere could throttle economic growth, and as always, energy prices remain inherently difficult to predict,” Hegar said. “On balance, however, the Texas economy appears poised for continued growth. Our economic outlook is cautiously optimistic, and this estimate reflects that forecast.”