comptroller seal Texas Comptroller of Public Accounts

FOR IMMEDIATE RELEASE

January 12, 2015

Texas Comptroller’s Office Releases New How-To Videos for Sales Tax Filers

(AUSTIN) — Texas Comptroller Glenn Hegar released the state’s Biennial Revenue Estimate today, showing the state is projected to have approximately $113 billion in revenue available for general-purpose spending during the 2016-2017 biennium.

“Texas recovered well from the recession of 2008-2009 and witnessed strong economic growth well ahead of the rest of the country. This recovery is perhaps most obviously illustrated in our tremendous job growth figures of 1.1 million since the recession, which far outpaced those of other large states,” Hegar said. “This was partly attributable to the recent shale oil boom in Texas which helped counterbalance a sluggish national recovery and weakness in other sectors of the economy. Texas remains a leader on the national economic stage and while we anticipate the robust pattern of growth the state has seen in recent years to moderate, we do expect continued expansion of the overall Texas economy.”

The state begins with a projected $7.5 billion ending balance from the current biennium. This amount is added to the estimated $110.4 billion in projected General Revenue-related collections from taxes, fees and other income over the course of the 2016-17 biennium. From this amount about $5 billion will be set aside for transfers to the Rainy Day Fund and State Highway Fund. The resulting $113 billion represents the estimated revenue available to the Legislature for general purpose spending in the next biennium.

In fiscal years 2013 and 2014 the Texas economy saw inflation-adjusted growth rates of 4.3 and 3.7 percent, respectively. In fiscal 2015 the Texas economy is projected to grow by 3 percent. That growth rate increases slightly to 3.2 percent in fiscal 2016 and increases further to an estimated 4.1 percent in fiscal 2017. The state’s unemployment rate, which has fallen significantly since the recession peak of 8.3 percent, is expected to remain around 5 percent over the coming biennium.

The state’s largest tax revenue source is the sales tax, which accounts for more than half the state’s general revenue. It is expected to generate approximately $61.2 billion in the 2016-17 biennium, an 8.9 percent increase over 2014-15 collections.

Among other large tax revenue sources:

  • Motor vehicle related taxes, including sales, rental and manufactured housing taxes, are expected to reach $10 billion, up 14.6 percent from 2014-15.
  • Oil production and regulation taxes are projected to generate $5.7 billion, a 14.3 percent decrease from the current biennium; natural gas production tax revenue is expected to be $3.2 billion, an 8 percent decrease from the current biennium.
  • The state’s franchise tax revenue for all funds is estimated at $9.6 billion for 2016-17, a 3.7 percent increase.

“The significant drop in oil prices in recent months will likely lead to a marked slowdown in oil exploration and production. This slowdown will dampen overall economic growth in Texas,” Hegar said. “However, in addition to the economic boost felt by Texas motorists as a result of lower gasoline prices, there are industries in Texas’ diverse economy such as transportation and some manufacturing that will benefit from lower energy prices. This, coupled with continued strength in construction, professional services and other sectors of the broader economy, should somewhat counterbalance a slowdown in the energy sector.”

At the end of the current biennium, the state’s Rainy Day Fund will have a balance of $8.5 billion, absent any additional appropriations that might be made by the Legislature. At the end of the 2016-17 biennium, the balance is projected to be approximately $11.1 billion, absent any legislative appropriations.

State revenue from all sources is estimated at $220.9 billion for the 2016-17 biennium, including approximately $110.5 billion in federal receipts and other income.

The full Biennial Revenue Estimate is available on the Comptroller’s website at www.Comptroller.Texas.Gov/finances/Biennial_Revenue_Estimate/. Visuals from today’s press conference are also available on the Comptroller’s website at www.TexasTransparency.org/Biennial_Revenue_Estimate/.

—30—