State legislators are expected to have an unprecedented amount of money in general revenue to help pay for the state's operations in 2024-25, Texas Comptroller Glenn Hegar (R) says.
The revenue estimate of $188.23 billion announced by Hegar on Monday is 26% more than what lawmakers had during the last budget cycle and is far more money than legislators have ever had at their disposal.
Hegar described the Biennial Revenue Estimate for the next two years as "unprecedented."
"The enormous amount of projected revenues give the state a remarkable, or a truly once-in-a-lifetime opportunity, for historical actions in this legislative session," Hegar said.
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Hegar attributed Texas' economic well-being to several factors including how the state recovered from the COVID-19 pandemic along with high energy prices and the highest inflation in four decades.
Hegar warned that because most of the state's revenue comes from sales taxes the estimate could be hampered by increased interest rates or other attempts to stymie inflation that may deepen a recession and curb consumer spending. He also said volatility in the energy marketplace could impact the state's numbers.
"I must advise some caution as these decisions are made. Bluntly, don't count on me announcing another big revenue jump in two years from now," Hegar said. "The revenue increases that we have seen have been in many ways unprecedented and we can not reasonably expect a repeat. We are unlikely to have an opportunity like this again."
Hegar said $10 billion will be held back for the highway fund and rainy day fund, the latter of which is expected to have an all-time high balance of more than $27 billion at the end of the 2024-25 cycle.
Texas Lt. Gov. Dan Patrick (R), who leads the state senate, said in a statement Monday afternoon the revenue estimate shows the Texas economy is "red hot" and that though state senators will undoubtedly have plenty of ideas about how to spend the money "Texas taxpayers must first receive tax relief before we commit to any new spending."
Patrick promised in July 2022, when Hegar announced another "unprecedented windfall" of billions in surplus funds, that money should first be returned to Texas property owners who have been burdened by increasing property taxes.
The lieutenant governor said in December 2022 that one of the ways he hoped to return money to property owners was by increasing the homestead exemption. Legislators are expected to put forward other proposals during the upcoming session.
The Biennial Revenue Estimate is announced every two years before the state lawmakers open their legislative session. The 88th Texas Legislature convenes on Tuesday, Jan. 10 at the state capitol. State lawmakers have a lot of priorities on their agenda, including property taxes, border security, gun control and the state's maligned power grid.
