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Texas lawmakers are returning to Austin this week with an overflowing price range surplus, thanks to the pandemic restoration, inflation and excessive power costs, Comptroller Glenn Hegar mentioned Monday.
The state is projected to finish the 2022-2023 biennium in August with practically $33 billion in extra money, up from the $27 billion Hegar predicted final summer time. Revenue for the subsequent two fiscal years can also be anticipated to develop by about $10 billion, he mentioned.
IN-DEPTH: Massive surplus raises stakes for Republicans
“The revenue increases that we’ve seen have been, in many ways, unprecedented, and we cannot reasonably expect a repeat,” Hegar mentioned, referring to it as a “once-in-a-lifetime” scenario.
The announcement is welcome news to Republican leaders, who’re already weighing how finest to use the cash. The Legislature is sort of sure to put a lot of the surplus into reducing property taxes for householders, and lots of have talked about infrastructure initiatives like increasing entry to high-speed web.
Inflation has been a significant component over the previous yr, driving up gross sales and different state tax income. Sales taxes account for greater than half of the {dollars} collected by the state, and Hegar mentioned he expects that to develop barely over the approaching biennium.
Tax income for fiscal yr 2022 alone jumped greater than 25 p.c, by far the most important improve since 1997.
Texas was additionally ready to use billions in federal help for the coronavirus pandemic to offset basic bills, which freed up money heading into the brand new legislative session. In addition, taxes from oil and pure fuel manufacturing introduced in simply over 13 p.c of basic income.
“Inflation is no longer accelerating, but it remains well above the Federal Reserve’s policy target,” Hegar famous. “If the Federal Reserve again significantly increases interest rates to try to control inflation, this could deepen an expected mild recession in 2023.”
On prime of the surplus, Texas’s Economic Stabilization Fund, often called the wet day fund, is predicted to swell to greater than $26 billion by fiscal yr 2025, Hegar mentioned.
Lt. Gov. Dan Patrick, who leads the state senate, welcomed the news and vowed to prioritize tax reduction.
Hegar’s estimate “is further proof of the true might of our economy,” he mentioned in a press release. “Our conservative policies, including no income tax and minimal regulation, attract businesses and grow jobs.”
But Texas additionally continues to face power funding shortages and has seen a rising exodus of public college lecturers in a state with comparatively low salaries.
“A number of critical services — like Early Childhood Intervention for toddlers and the state’s system for processing children’s Medicaid applications — are dealing with staffing shortages and years of underfunding,” Stephanie Rubin, CEO of the health advocacy group Texans Care for Children, said in a statement. “This session, there’s no excuse for shortchanging services that kids and families rely on.”
jeremy.blackman@chron.com
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