Texas Comptroller Susan Combs Releases Biennial Revenue Estimate
AUSTIN – Texas Comptroller Susan Combs released the state’s Biennial Revenue Estimate, showing the state is projected to have $101.4 billion available for general-purpose spending during the 2014-15 biennium.
“Texas experienced a very strong rebound from a severe recession,” Combs said. “The state’s robust economic recovery led to better-than-expected revenue collections in major taxes such as the sales tax, oil and natural gas production taxes and motor vehicle sales taxes. The outlook for both the economy and state revenue is for continuing expansion as the fast-growth of the economic recovery gives way to moderate, sustained growth.”
The state’s general revenue collections from taxes, fees and other income is estimated to be $96.2 billion for the 2014-15 biennium, of which about $3.6 billion would be set aside for future transfers to the Rainy Day Fund. This leaves approximately $92.6 billion in net general revenue. Adding to that is a projected $8.8 billion ending balance from the current biennium, giving the Legislature the estimated $101.4 billion for general- purpose spending for the next biennium.
The Texas economy, in inflation-adjusted terms, is projected to increase by 3.4 percent in fiscal 2013, another 3.4 percent in fiscal 2014 and 3.9 percent in fiscal 2015. The state’s unemployment rate, which reached 8.2 percent during the recession, is expected to continue slowly dropping and average 6 percent during 2015.
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 $54.9 billion in the 2014-15 biennium, a 9.4 increase from the current biennium.
Among other large tax revenue sources:
- Motor vehicle sales taxes are expected to be about $7.9 billion in 2014-15, a 9.3 percent increase from the current biennium.
- The oil production tax is projected to generate about $4.6 billion, a 3.9 percent increase from the current biennium; natural gas production tax revenue is estimated to be $2.5 billion, about a 4 percent decrease from the current biennium.
- The state’s franchise tax revenue for all funds is estimated at $9.5 billion for 2014-15, a 3.1 percent increase.
“While the Texas economy is doing well, we must be mindful of factors that cast a shadow over our economy,” Combs said. “The economic and financial troubles dogging Europe drag on and the powerful Chinese economy has slowed. Meanwhile, the federal government remains gridlocked across a number of issues. Economic and regulatory uncertainty, including the possibility of increased taxation, can delay purchasing decisions by businesses and households.”
At the end of the current biennium, the state’s Rainy Day Fund will have a balance of about $8.1 billion, absent any appropriation that might be made by the Legislature. At the end of the 2014-15 biennium the balance is projected to be approximately $11.8 billion, absent any legislative appropriations.
State revenue for all purposes is estimated at $208.2 billion for the 2014-15 biennium, which would include approximately $112 billion in federal receipts and other income.
The full Biennial Revenue Estimate is available on the Comptroller’s website athttp://www.window.state.tx.us/finances/Biennial_Revenue_Estimate/bre2014/.