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According to the state comptroller, Texas is heading into an election year with projections that more than $ 24 billion will remain at the end of the current budget, despite a pandemic that started with fears the economy could be overwhelmed. affected as hard as public health.
This projected pile of money gives politicians the power to grant wishes – or offer to grant wishes – for the budget giveaways their constituents want, like lower property taxes and higher spending on the government. public education, health care, highways and law enforcement.
A few weeks ago, Comptroller Glenn Hegar said the state will generate nearly $ 23 billion more in general revenue in the current two-year budget period than it originally estimated. .
He expects the state to end the current budget period, which runs until August 2023, with nearly $ 12 billion in the bank and an additional $ 12.6 billion in the Stabilization Fund. economic fund, more commonly known as the Rainy Day Fund.
In the spring of 2020, Hegar was telling state lawmakers and budget writers to curb spending and expect an economic slowdown as the coronavirus took hold. The improvement in the official outlook has been constant and dramatic since then. In each of the past seven months, state tax revenues have exceeded $ 3 billion; it had only reached that monthly total three times in the history of the state.
“Texas personal income, supported by federal pandemic relief spending support, grew about 6.5% in fiscal 2021 after growing 5.4% in 2020,” according to the latest projection of the State Revenue Controller. The state’s gross product rose 7.9% in 2021 and is expected to rise 8.3% next year, according to the report.
The traditional warning about the controller’s forecast was in the fine print: Hegar said COVID-19, supply chain issues, inflationary pressures and labor shortages could slow or derail the train economic.
It could just as well have been overlooked: this is the start of an electoral cycle. Candidates are standing for election. Around the same time next year, the primary and general elections will be behind us, and newly elected and re-elected lawmakers will prepare to come to Austin to pass new laws and draft a new budget.
Given the amount of money Hegar predicts will be available, these new office holders will entertain every politician’s fantasy: there is money in the state treasury, and we can make big proposals without imposing new taxes or budget cuts to cover costs.
They don’t need to wait until the 2023 session begins. Challengers and incumbents are already starting to talk to voters. Some people worry about inflation and other economic issues. For example, Hegar and others have said that we are in a “K-shaped recovery,” where economic conditions are improving rapidly for some parts of the economy while they are getting worse for others.
The state appears to be one of the beneficiaries, a godsend for anyone who wants money for one of the most expensive items in the state budget – or on campaign wish lists.
It’s not the only money that’s piling up. Federal revenues for the state’s Coronavirus Relief Fund were $ 44.1 billion in the last budget, with an additional $ 36.9 billion expected in the current two-year budget period. according to the controller. Texas expects to get $ 35.4 billion from the federal infrastructure bill over the next five years, most for transportation spending.
It sets the table for all those who have been stuck on a tight state budget. It’s easy for budget writers to say no in lean times. When there is money in the bank, they don’t have the excuse of “sorry, no money”.
Discipline is rarer during political election season than during the ruling season that follows. Until the general election next November, politicians can paint the best pictures they want, offering new programs, services, tax breaks and whatever they can imagine with their consultants. When voters ask how they’re going to pay for it, they’re pointing their finger at those pink projections of bulging treasury safes.
They won’t have to do the math until after the election.