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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

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The 2022-23 Certification Revenue Estimate Transmittal Letter

November 4, 2021

The Honorable Greg Abbott, Governor
The Honorable Dan Patrick, Lieutenant Governor
The Honorable Dade Phelan, Speaker of the House
Members of the 87th 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 2022-23 biennium and other appropriations bills approved by the 87th Legislature. The estimates in this document include actual revenue collections and disbursements through August 31, 2021, and the estimated fiscal impact of all legislation passed by the 87th Legislature, Regular Session, as well as the First, Second and Third Called Sessions.

After accounting for statutory transfers, balances on hand at the close of the 2020-21 biennium and expected revenue collections and adjustments, the state will have a total of $135.32 billion in General Revenue-related funds available. This revenue will support general-purpose spending of $123.33 billion for the 2022-23 biennium, resulting in an expected ending General Revenue-related certification balance of $11.99 billion.

In fiscal 2022, the Economic Stabilization Fund (ESF) and State Highway Fund (SHF) each will receive $1.46 billion in transfers from the General Revenue Fund from severance taxes collected in fiscal 2021 and a transfer of $2.43 billion in fiscal 2023 from severance taxes collected in fiscal 2022. 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 2023 ending ESF balance of $12.62 billion.

The Texas economy rebounded strongly from the deep but short recession caused by the onset of the COVID-19 pandemic, and we project continued expansion of the Texas economy in this biennium. Since April of this year, the Texas economy and state tax collections, particularly from sales taxes, have continued to outperform expectations. Though we remain optimistic, this is a conservative estimate. Risks impacting this estimate include continued global supply chain disruptions and bottlenecks affecting a range of products. Labor shortages and inflationary pressures could impact both business and consumer demand. Volatile energy prices and the potential spread of coronavirus variants also remain uncertainties for Texas’ economic outlook.

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: Jerry McGinty, Legislative Budget Board

A CLOSER LOOK Certification Revenue Estimate

The Comptroller issues the Biennial Revenue Estimate before the regular legislative session convenes in January to project the amount of revenue available for lawmakers to spend on state programs through the following biennium. The Certification Revenue Estimate — provided after the session ends, and this year after three special sessions — revises projections to reflect legislative activity and current economic information.

IN THE 2021 CRE, the Comptroller is projecting substantial growth in revenue available for general-purpose spending in the 2022-23 biennium. Since April of this year, the Texas economy and state taxes have continued to outperform expectations after being suppressed by the pandemic earlier in the 2020-21 biennium. The Comptroller expects continued economic expansion through the 2022-23 biennium and will issue revenue updates if conditions warrant.

Revenue Available for General Purpose Spending
in the 2022-23 Biennium (In Billions of Dollars)


Revenue 2020-21 Actual 2022-23 Projected
General Revenue-Related (GR-R)
Tax Collections
plus$101.76 plus$117.20
Other GR-R Revenues plus$15.72 plus$16.17
Total GR-R Revenues equals$117.49 equals$133.37
Beginning Balance
(Funds carried forward from previous biennium)
plus$5.28 plus$10.96
Total GR-R Revenue
& Fund Balances
equals$122.76 equals$144.33 SUBTOTAL
Revenue Reserved for Transfers to the Economic Stabilization and State Highway Funds minus$5.18 minus$9.01
Total Revenue Available for General-Purpose Spending equals$117.58 equals$135.32 TOTAL

Note: Totals may not sum due to rounding.

Revenue Transfers to the State Highway Fund and Rainy Day Fund

Severance Tax Transfers to the ESF and SHF

The rainy day fund will have a projected balance of
$12.62 billion
at the end of fiscal 2023, taking into account interest and investment earnings, and absent any additional legislative appropriations.

The State Highway Fund (SHF) and Economic Stabilization Fund (ESF or Rainy Day Fund) receive required transfers of tax revenue that are reflected in the CRE, including:

  • $1.46 BILLION each from oil and gas severance taxes in  fiscal 2022 and
  • $2.43 BILLION apiece in  fiscal 2023.

In addition, the SHF will receive:

  • $2.5 billion. in sales tax revenue in each year of the 2022-23 biennium.
  • $297 million in fiscal 2022 and an expected $338 million in  fiscal 2023 in motor vehicle sales tax revenue.