State lawmakers returning to the Capitol on Tuesday will face a bleak budget outlook thanks to low oil and gas prices and past budget decisions that could tie their hands if they attempt to bolster the distressed foster care system or increase funding for public education.
Comptroller Glenn Hegar unveiled Monday a $104.9 billion biennial revenue estimate, which determines how much money lawmakers can spend in the 2018-19 budget. That’s 2.6 percent below the current two-year budget’s revenue estimate of $107.7 billion.
The revenue estimate deals only with money over which lawmakers have discretionary control. The total amount of available state revenue, including federal funds that pass through the state and other dedicated revenue streams, will be $224.8 billion for 2018-19.
Hegar noted that the Texas economy continues to grow, albeit at a slow rate. But the budget is not keeping pace, he said, because of slumping fossil fuel prices, which affect the state’s primary revenue source, the sales tax, and fiscal decisions made in recent legislative sessions.
In particular, Hegar pointed to the passage of Proposition 7, a state constitutional amendment voters approved in 2015 that will divert $4.7 billion in 2018-19 from discretionary revenue to the State Highway Fund.
Additionally, lawmakers last year cut the franchise tax on businesses by 25 percent. That cut will result in the tax yielding $7.8 billion in the 2018-19 budget, a 2.4 percent decrease.