AUSTIN, Texas — During the upcoming legislative session, Texas lawmakers are going to have to decide how to spend a record $188.2 billion over the next two years.
As the population and economy continue to grow in Texas, so does the amount of money state lawmakers have to spend. The surplus has been called "unprecedented" by the state's chief financial officer.
“This revenue estimate is absolutely historical when compared to any other estimate that we’ve given,” Texas Comptroller Glenn Hegar said Monday afternoon during a news conference revealing the new estimates.
Hegar said it's more than 26% higher than the current two-year period. He credits a booming economy, spikes in energy prices, and high inflation for the budget number. Lawmakers will be dealing with a surplus of about $33 billion but don't want to spend for the sake of spending.
“We cannot reasonably expect a repeat. We are unlikely to have an opportunity like this again,” Hegar said.
After Hegar's announcement on Monday afternoon, Lt. Gov. Dan Patrick repeated a call for tax relief before new spending. Patrick recently said he wants to raise the homestead exemption for Texas homeowners from $40,000 to $60,000 or possibly even higher.
"So, not everyone's property taxes are the same based on where they live, but basically, you're paying about $3 for every $100 of taxes. So for every $100,000 value, you're paying about $3,000 in taxes. So, let's do easy math here – if we raise the exemption to $50,000 that's a $1,500 savings a year,” Patrick said during an episode of Yallitics on KHOU 11's sister station WFAA.
Beyond property tax relief, University of Houston Political Science Professor Brandon Rottinghaus expects the legislature to spend money on water programs due to the significant drought throughout the state, as well as transportation needs.
Rottinghaus said a deeper checkbook could mean a longer debate.
“It could be that the budget cycle and budget fight lasts a little bit longer than normal since there’s just a lot more money to fight about,” Rottinghaus said.
It'll be a fight going down in Austin over the next four months with implications across the state for the next two years.
Patrick's full statement
“Since I’ve become Lt. Governor, we’ve taken the utmost care to manage our budget wisely and conservatively. The Texas economy is red-hot. We are leading the United States forward in the global marketplace and it is clear for all to see.
“Comptroller Hegar’s Biennial Revenue Estimate is further proof of the true might of our economy. Our conservative policies, including no income tax and minimal regulation, attract businesses and grow jobs.
“Our commitment to keeping our state open during the COVID-19 pandemic is another key reason why our state enters the upcoming 2024-2025 biennium in a position of strength. Every member of the Texas Senate will have ideas on how to use this unprecedented revenue. We will introduce our budget in the coming days. As I stated previously in my November press conference, Texas taxpayers must first receive tax relief before we commit to any new spending.
“Additionally, we must not spend all the money. We must keep a responsible reserve in case Joe Biden's inflationary policies and out-of-control spending causes a national recession in 2023 and 2024.
“There are a range of challenges facing our state - first and foremost, reinforcing our grid with dispatchable power - but I am confident that we can continue to strengthen Texas so it remains the best place to live, work, raise a family and start a business.”