In a July 14 letter to state leadership, Comptroller Glenn Hegar said the state will have $149 billion in general revenue funds available for general-purpose spending for the 2022-23 biennium, resulting in a projected FY2023 ending balance of $27 billion. The updated estimate is a $15 billion increase from Hegar's November estimate of the FY2023 ending balance. The ending balance does not account for any 2022-23 supplemental appropriations the Legislature may make.
According to Hegar, many tax revenues reached their highest collections on record, and this fiscal year experienced the most significant one-year increase in total collections in Texas history. The unprecedented growth is particularly true for state sales taxes, which represent 60% of state tax collections. Monthly sales tax collections for the past 15 months exceeded $3 billion.
The Comptroller pointed to inflation at levels unseen since the 1980s as a significant contributing factor to the record tax collections in sales and other tax revenues over the past year. Given the high rates of inflation and risk of recession, Hegar said he expects a slowdown in FY2023.
Heading into the legislative session that begins in January 2023, legislators should expect a substantial surplus to spend on property tax relief and other leading budget priorities.
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