Texas experienced a very strong rebound from a severe recession. The states robust economic recovery led to better-than-expected revenue. . .
--Susan Combs Comptroller
Texas Insider Report: AUSTIN Texas Texas Comptroller Susan Combs released the states Biennial Revenue Estimate showing the state is projected to have $101.4 billion available for general-purpose spending during the 2014-15 biennium.
Texas experienced a very strong rebound from a severe recession" Combs said. The states robust economic recovery led to better-than-expected revenue collections in major taxes such as the sales tax oil and natural gas production taxes and motor vehicle sales taxes. The outlook for both the economy and state revenue is for continuing expansion as the fast-growth of the economic recovery gives way to moderate sustained growth."
The states general revenue collections from taxes fees and other income is estimated to be $96.2 billion for the 2014-15 biennium of which about $3.6 billion would be set aside for future transfers to the Rainy Day Fund. This leaves approximately $92.6 billion in net general revenue. Adding to that is a projected $8.8 billion ending balance from the current biennium giving the Legislature the estimated $101.4 billion for general- purpose spending for the next biennium.
The Texas economy in inflation-adjusted terms is projected to increase by 3.4 percent in fiscal 2013 another 3.4 percent in fiscal 2014 and 3.9 percent in fiscal 2015. The states unemployment rate which reached 8.2 percent during the recession is expected to continue slowly dropping and average 6 percent during 2015.
The states largest tax revenue source is the sales tax which accounts for more than half the states general revenue. It is expected to generate approximately $54.9 billion in the 2014-15 biennium a 9.4 increase from the current biennium.
- Among other large tax revenue sources:
- Motor vehicle sales taxes are expected to be about $7.9 billion in 2014-15 a 9.3 percent increase from the current biennium.
- The oil production tax is projected to generate about $4.6 billion a 3.9 percent increase from the current biennium; natural gas production tax revenue is estimated to be $2.5 billion about a 4 percent decrease from the current biennium.
- The states franchise tax revenue for all funds is estimated at $9.5 billion for 2014-15 a 3.1 percent increase.
While the Texas economy is doing well we must be mindful of factors that cast a shadow over our economy" Combs said. The economic and financial troubles dogging Europe drag on and the powerful Chinese economy has slowed. Meanwhile the federal government remains gridlocked across a number of issues. Economic and regulatory uncertainty including the possibility of increased taxation can delay purchasing decisions by businesses and households."
At the end of the current biennium the states Rainy Day Fund will have a balance of about $8.1 billion absent any appropriation that might be made by the Legislature. At the end of the 2014-15 biennium the balance is projected to be approximately $11.8 billion absent any legislative appropriations.
State revenue for all purposes is estimated at $208.2 billion for the 2014-15 biennium which would include approximately $112 billion in federal receipts and other income.
The full Biennial Revenue Estimate is available on the Comptrollers website at
http://www.window.state.tx.us/finances/Biennial_Revenue_Estimate/bre2014/.
