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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

transparency

The 2020-21 Certification Revenue EstimateTransmittal Letter

October 10, 2019
The Honorable Greg Abbott, Governor
The Honorable Dan Patrick, Lieutenant Governor
The Honorable Dennis Bonnen, Speaker of the House
Members of the 86th Legislature

Ladies and Gentlemen:

In accordance with Texas Government Code Section 403.0131, I hereby present the detailed tables for the revenue estimate I used to certify the General Appropriations Act for the 2020-21 biennium and other appropriations bills approved by the 86th Legislature. The estimates in this document include actual revenue collections and disbursements through August 31, 2019, and the estimated fiscal impact of all legislation passed by the 86th Legislature.

After accounting for statutory transfers, balances on hand at the close of the 2018-19 biennium and expected revenue collections and adjustments, the state will have a total of $121.76 billion in General Revenue-related funds available for the 2020-21 biennium. This revenue will support general-purpose spending of $118.86 billion for the 2020-21 biennium, resulting in an expected ending General Revenue-related certification balance of $2.89 billion.

In fiscal 2020, the Economic Stabilization Fund (ESF) and State Highway Fund (SHF) each will receive $1.67 billion in transfers from the General Revenue Fund from severance taxes collected in fiscal 2019 and a transfer of $1.59 billion in fiscal 2021 from severance taxes collected in fiscal 2020. After accounting for interest and investment earnings by the ESF, along with expenditures authorized by appropriations made in recent legislative sessions, we project a fiscal 2021 ending ESF balance of $9.35 billion.

In 2015, the Legislature passed and voters approved a constitutional amendment that requires a transfer of sales tax revenue to the SHF. As a result, $2.5 billion of state sales tax revenue will be deposited to the SHF in each year of the 2020-21 biennium. That same constitutional amendment also stipulated that a portion of motor vehicle sales tax revenue in excess of $5 billion collected in any fiscal year also be transferred to the SHF. We project that the threshold will be met for the first time in fiscal 2020 and that $35 million will be transferred to the SHF from motor vehicle sales tax collections in the 2020-21 biennium.

In fiscal 2019, the Texas economy continued to grow at rates among the highest in the nation. We are projecting continued expansion of the Texas economy in this biennium. The most likely scenario is one of steady expansion at a pace below that of the 2018-19 biennium. Risks to this estimate include ongoing uncertainty about trade and national economic policy, slowing global economic growth, and volatility in energy prices resulting from instability and potential conflict in the Middle East.

I will continue to monitor the Texas economy and state revenues closely, and will keep you informed of any significant events as they arise.

Sincerely,
Glenn Hegar

Enclosure
cc: Legislative Budget Board

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A CLOSER LOOK Certification Revenue Estimate


Prior to the legislative session, the Comptroller issues a Biennial Revenue Estimate (BRE) to tell lawmakers how much they can spend over the next two years. After the legislative session, the Comptroller issues a Certification Revenue Estimate (CRE) to reflect legislative activity and the most current economic information, as well as to take into account final revenue numbers for the recently ended fiscal year.

Revenue Available for General
Purpose Spending in the
2020-21 Biennium(In Billions of Dollars)

Revenue Biennial Revenue Estimate
May 2019
Certification Revenue Estimate
October 2019
General Revenue-Related (GR-R)
Tax Collections
$107.32 $108.14
Other GR-R Revenues plus$14.16 plus$14.99
Total GR-R Revenues equals$121.48 equals$123.13
Beginning Balance
(Funds carried forward from 2019)
plus$4.70 plus$4.72
Change in GR-Dedicated
Account Balances from the BRE
plusN/A plus$0.39
Total GR-R Revenue
& Fund Balances
equals$126.18 equals$128.24 SUBTOTAL
Revenue Reserved for Transfers to the Economic Stabilization and State Highway Funds minus$6.55* minus$6.48
Total Revenue Available for General-Purpose Spending equals$119.63 equals$121.76 TOTAL

* Includes reserve for transfer to Texas Tomorrow Fund

Severance tax transfers to the Rainy Day Fund and the State Highway Fund

Each fiscal year, amounts reserved in the previous fiscal year are transferred to the state’s Economic Stabilization Fund (ESF), also known as the “Rainy Day Fund,” and the State Highway Fund (SHF).


In fiscal 2020, 1.67 billion dollars will be transferred to both the Rainy Day Fund and the State Highway Fund. In fiscal 2021, the two funds will receive 1.59 billion dollars each.

Projected General Revenue-Related Revenues

data in following table

Note: Percentages do not sum to 100.0 due to rounding.

Revenue SourcePercent of Total
Motor Vehicle Sales and
Rental Taxes
8.2%
Oil Production Tax6.4%
Francise Tax5.0%
Motor Fuel Taxes1.7%
Natural Gas Production Tax2.5%
All Other State Taxes9.9%
Sales Taxes54.2%
Fees, Investments and
Other Non-Tax Revenue
12.2%