There is now another benefit of the booming Texas economy. State Comptroller Glenn Hegar announced this week that the revenue estimate for the 2019 Legislature has been revised upward by $2.8 billion, to about $110 billion. The main drivers of the increased revenue are sales taxes and oil and gas taxes, thanks to higher oil prices and low unemployment.
Chris Bryan, spokesman for the Comptroller's Office, tells KTRH the strong economic growth Texas has seen over the past year is the biggest factor in the revised revenues. "As a result of that economic growth, we are seeing better sales tax revenues, and we are seeing really revenues across the board coming in higher than we expected," he says. "We're seeing oil prices at around three-year highs at the moment, and we're seeing production really ramp up in the last 6-12 months, and all of that is contributing to double-digit growth in the oil and gas severance tax revenue."
That oil and gas tax revenue is particularly important, because it directly goes into the state's highway fund and the stabilization fund, better known as the "rainy day fund." "We are looking now at an ending balance for that rainy day fund in fiscal '19 at nearly $11.9 billion, so that's a significant chunk of money," says Bryan. Indeed, if that number holds, the Comptroller says it would be the highest "ending balance" in the fund's history.
The good news was delivered with a heavy dose of caution, however. The Comptroller's Office notes that the numbers will be revised again before the Legislature convenes in January, so they could decline between now and then. Also, the revenue estimate does not include any supplemental funding needs that remain between now and January, one of which is very important to Houston. "Hurricane Harvey and the costs associated with that are a big chunk of potential supplemental needs that lawmakers are going to have to address," says Bryan.