Texas Comptroller of Public Accounts
FOR IMMEDIATE RELEASE
July 7, 2015
(AUSTIN) - As a result of strong fund balances, sound fiscal management and conservative budgeting, Texas Comptroller Glenn Hegar announced today that the state will not issue Texas Tax and Revenue Anticipation Notes for fiscal 2016.
The state has historically issued these short-term (one year or less) debt obligations, also called TRANs, for cash-flow purposes, to address periodic mismatches between revenues and expenditures during the fiscal year. These anticipated mismatches result primarily from the state providing nearly 50 percent of its payments to local school districts in the first three months of the fiscal year.
Texas has issued a TRAN every year for nearly three decades. For the coming fiscal year, however, the adoption of a biennial budget below revenue projections coupled with recent fund growth will allow the state to meet its cash flow needs without issuing short-term debt obligations.
"Every fiscally responsible Texas family out there knows that you shouldn't borrow money when you don't need to, and the state shouldn't operate any differently," Hegar said. "Even after a session that delivered significant tax relief and took positive steps toward addressing important long term funding issues such as transportation and state pensions, we can meet our cash flow needs in fiscal 2016 without adding to the state's short-term debt."
The state will bridge the gap between expenditures and revenues using available funds accessed through a combination of intrafund and interfund borrowing. Intrafund borrowing taps available general revenue fund cash balances while interfund borrowing taps funds outside of general revenue such as the state's economic stabilization fund (ESF).
As revenues come in, the state will repay the borrowed funds with interest as required by law. The agency anticipates all funds to be repaid by May 2016, coinciding with the receipt of 2016 franchise tax revenues.
"With approximately $8.5 billion currently in the ESF and more than $6 billion in general revenue funds, the state's available large cash balances represent tremendous assets for Texas," added Hegar. "The responsible thing to do is to make sure that money is working for taxpayers and not send interest payments out of state when we don't have to."
As for the outstanding TRAN, Texas will fully repay the $5.4 billion borrowed last year on Aug. 31, 2015.
In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Google Chrome, Microsoft Internet Explorer and Apple Safari.