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News Release from Comptroller Susan Combs

For Immediate Release
January 10, 2011

Comptroller Susan Combs Releases 2012-13 Biennial Revenue Estimate

(AUSTIN) – Texas Comptroller Susan Combs released the state’s Biennial Revenue Estimate showing the state is projected to have $72.2 billion available for general-purpose spending during the 2012-13 biennium.

“The recent recession has had its impact on the state revenue outlook as major revenue sources such as the sales tax generated less money in the last couple of years,” Combs said. “While we have turned the corner to an economic recovery, the revenue estimate I’m releasing today is for moderate growth.”

The state’s general revenue collections from sources such as taxes, fees and other income is estimated to be $77.3 billion for the 2012-13 biennium, of which more than $800 million would be set aside as part of future transfers to the Rainy Day Fund, leaving approximately $76.5 billion in net general revenue. Offsetting that revenue is a projected negative $4.3 billion ending balance for the current biennium, leaving the Legislature the estimated $72.2 billion for general purpose spending for the next biennium.

Lawmakers will address reducing the negative ending balance for the current biennium when they convene for the legislative session.

Economic growth in the state is projected to reflect a growing population and revival of business activity. The Texas economy, in inflation-adjusted terms, is projected to increase by 2.6 percent in fiscal 2011 compared to the previous year, and by 2.8 percent in fiscal 2012 and 3.4 percent in fiscal 2013.

Texas had lost about 431,300 jobs from the time of the state’s employment peak in the summer of 2008 to the bottoming of employment in the fall of 2009. But since then, the state has added back more than 220,000 jobs, and is on track to gain back all lost jobs by the second half of fiscal 2012.

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 $42.9 billion in the 2012-13 biennium, an increase of about $3 billion, or 8 percent, from the current biennium.

Among other large tax revenue sources, the motor vehicle sales tax is expected to generate about $5.8 billion in 2012-13, an 8.8 percent increase from the current biennium. Natural gas production tax revenue is expected to increase by more than 10 percent to $1.5 billion the next biennium. The oil production tax is projected to generate about $1.9 billion, about a 4 percent decline. The state’s total franchise tax revenue is estimated at $8.8 billion for 2012-13, about an 11 percent increase.

“The state’s economy is growing, but we have not yet reached a stage of sustained and broad-based robust growth,” Combs said. “I would urge lawmakers to continue their historical practice of careful budget deliberations.”

At the end of the current biennium, the state’s Rainy Day Fund will have a balance of about $8.2 billion. At the end of the 2012-13 biennium the balance would be approximately $9.4 billion, absent any appropriation that might be made by the 82nd Legislature.

State revenue for all purposes is estimated at $177.8 billion for the biennium, which would include approximately $100.5 billion in federal receipts and other income.

The full Biennial Revenue Estimate is available on the Comptroller’s Web site at www.window.state.tx.us/taxbud/bre2012.

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