Comptroller Releases Biennial Revenue Estimate

Glenn Hegar, just 10 days after officially being sworn in as the new state comptroller, released the 2016-17 Biennial Revenue Estimate (BRE). With a modest revenue growth forecast for 2016 and 2017 and a large ending-balance for 2015, the state is projected to have $113 billion in revenue available for general-purpose spending next biennium.

The state begins with a projected ending-balance for the 2014-15 biennium of $7.5 billion. This balance in addition to the $105.4 billion in revenue forecast for next biennium (after transferring $2.5 billion to the Rainy Day Fund and $2.5 billion to the State Highway Fund), will leave legislators with about $9.7 billion more in general-purpose revenue than the previous biennium.  According to Comptroller Hegar, “the ending balance also reflects reduced state spending, notably from strong rising local property tax collections by school districts which serve to supplant state funds for public education purposes.”

The state will also have an estimated $11.1 billion available in the Rainy Day Fund, after the projected transfers, by the end of the 2016-17 biennium.  Just recently the Joint Select Committee to Study the Balance of the Economic Stabilization Fund recommended the floor of the Rainy Day Fund at $7.0 billion.   

Comptroller Hegar projected that sales tax growth will increase by 8.9% over the 2014-15 collections and the oil and gas severance taxes are estimated to decrease by 14.3% compared to last biennium (the average price of oil per barrel was projected to be $65.42 and $69.27 for 2016 and 2017, respectively).   In addition, the state’s franchise tax is expected to increase by $338 million (3.7%) if the legislature returns the franchise tax rate to the original levels (it was reduced last legislative session by 2.5% the first year and 5% the second year). 

Taking into account that the estimated expenditures for 2014-15 biennium is $96 billion ($7 billion less than the 2014-15 funds available for certification amount) and the additional $9.7 billion available for the 2016-17 biennium, Moak, Casey & Associates believes that after potentially funding all current service needs the Legislature will still have approximately $11 billion of remaining available revenue for the 2016-17 biennium--an amount that if all were used would require a vote to suspend the constitutional spending limit. This $11 billion in available revenue gives the legislators the resources necessary to address school finance needs identified in the recent school finance case.   


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Posted By : Bob Popinski ~ 1/12/2015 1:09 PM
Related Categories: MCA Updates