October 29, 2014 3:42 PM

Greenfield: Here We Go Again

Surging state revenues continue to be ignored by Comptroller; next Lege may have $20 billion more than Combs' office estimates

In 1967, Ray Charles released “Here We Go Again” lamenting the return of a girlfriend. That song is quite appropriate following the release of September’s revenue collections by Comptroller Combs. According to the Comptroller’s News Archive, there has been no mention of either the growth in state tax collections for FY14 (6.7 percent) or the increase (10.7 percent) for September, 2014, the first month of FY15. So, “here we go again,” with a lack of the true fiscal situation of the state from the Comptroller.

Table 1 below shows the actual year-to-date percentage increase in monthly state tax collections for FY10 through FY15) and the current estimate growth rate (for FY14 and for FY15) from Comptroller Combs.

Over the last three fiscal years, the estimated growth in tax collections provided by Comptroller Combs has been significantly less than the growth realized by the state. Unless there is a dramatic downturn in the Texas economy this fiscal year, something no economic forecaster, not even Comptroller Combs, is projecting, the growth in realized tax collections will be at least three times the rate (1.9 percent) in the current estimate. This should result in the current Fiscal 2015 Ending Certification Balance increasing from $2.6 billion to a minimum $7.5 billion. This nearly $5.0 billion increase is the minimum increase as the state should expect reduced public education outlays as local property tax collections continue to exceed the amount the state expected to be collected. Given the continued growth in the Texas economy and immigration, we should expect local property tax collections to exceed the amount forecasted to support the Foundation School Program.
The rest of Stuart Greenfield's column can be found in today's R&D Department.

By Stuart Greenfield, Ph.D