The Lone Star State is expected to see a huge dip in revenue this fiscal year.
According to Texas Comptroller Glenn Hegar’s estimate released on Monday, Texas’ ending 2020 - 2021 balance will be close to $1 billion in the red.
“This is something that we have been working on, going back to the summertime, to make sure that we’re prepared to deal with as we go into the session,” said Texas Governor Greg Abbott. “As we look to the funds that are available to us to make sure that we will be able to continue to find the current budget cycle that we're currently in that ends at the end of August.”
Hegar announced a $112.5 billion revenue projection for the 2022 - 2023 biennium, a 0.4% decrease from funds available for the 2020 - 2021 biennium.
Governor Abbott says the loss in revenue is due to the pandemic. Some local cities like Waco say they're noticing the change.
“Enterprise funds, things like water, solid waste, those are still going strong,” said Waco Budget Manager Paul Diaz. “Obviously with some of the funds dealing with people coming out, we’re still seeing struggling and things like that hot tax revenue as well as the Texas Ranger Hall of Fame.”
Diaz says they’ve also seen an increase in several revenue streams like sales tax.
“Sales tax is one of the major streams for the general fund. So today, we're seeing some really positive numbers. We’re up to about 5% to 6% from where we were at the same period last year,” he said.
Killeen and Bell County are also reporting higher sales tax revenue, mainly due to a rise in online sales. With more vaccination clinics coming online, many are hoping hospitalizations and cases statewide will drop, allowing more businesses to fully open.
“When we get to the next budget cycle year that begins September 1 of this year, we should be well positioned as we have in the past with a very robust economy. Some people are even predicting an even faster growing economy in 2021 and 2022,” said Governor Abbott.
Just what that growth looks like depends largely on when the pandemic eases up.