The Texas Comptroller provides editorial opinions and updates on key issues, some published in the press as op-eds and others delivered to you via our From The Desk Of emails.
As you probably know, our agency’s duties include tracking the Texas economy and the revenues that support our state government. I’d like to report on two recent events that concern both.
First, on July 11, we released a new Certification Revenue Estimate (CRE). One of our agency’s most important duties is estimating the amount of revenue that will be available to the Legislature over each two-year budget period. We prepare the Biennial Revenue Estimate (BRE) before each regular session and, after the session, we follow up with a CRE that updates the BRE to reflect the effects of new laws and any economic changes that have occurred in the intervening months.
And right now, economic conditions are changing.
When I took office, I pledged to keep lawmakers and the taxpayers of our state informed on our economy and the state revenue on which it depends. That’s why, on July 11, we updated the CRE estimates. As we prepared to provide the updated estimate, I was surprised to learn that this would be the first time in 30 years this agency has updated a CRE for a reason other than a legislative session - since Bob Bullock held my job.
The update was prompted by unexpectedly strong economic growth. Both the state and national economies are expanding rapidly, and in Texas rising energy prices and production have given us a further boost. The state’s tax collections through June are up by nearly 12 percent compared to last year, while oil and natural gas tax collections have risen by more than 50 percent. Our unemployment is at historical lows. Texas’ conservative fiscal policy has helped the state economy create hundreds of thousands of new jobs. Read more about the new CRE and Wayfair ruling»
In previous columns, I’ve discussed our proposals for a better way to invest part of the state’s $11 billion Economic Stabilization Fund (ESF) — what folks usually call the “Rainy Day Fund.” At present, state law requires us to keep much of the revenue in the ESF invested in a way that isn’t even beating the inflation rate.
We’ve designed a prudent way to protect these funds against inflation while earning more for important state purposes. The additional earnings could be put to good use in what we’ve dubbed a “Legacy Fund”: a permanent endowment that would generate revenue to help the state cope with the rising costs of long-term obligations we face, such as employee pensions, retiree health care and infrastructure maintenance and expansion.
While it’s a new idea for Texas, I think it’s important to note that other states have similar programs. Read more A Chance to Guarantee Texas’ Legacy»
There’s a healthy conversation going on in Austin circles about the best way to responsibly manage Texas’ $11 billion Economic Stabilization Fund, or rainy day fund.
I’ve made some common-sense proposals about ways to grow the fund — while safeguarding it from inflation and market volatility — and earn some extra money for long-term budget needs.
It’s a subject we’ve needed to discuss for years, and I welcome the debate. But when my positions are mischaracterized, I must respectfully disagree. Read more Coming Out of the Rain to Realize Gains»
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