February 23, 2015 5:23 PM

Greenfield: Money, Money, Money, it just keeps rollin in

Number cruncher extraordinaire Dr. Stuart Greenfield says Comptroller Hegar’s estimate might not be optimistic enough. Among other things, he notes oil production for the fiscal year will exceed one billion barrels. That hasn’t happened since 1978.

Newly elected Comptroller Glenn Hegar’s Biennial Revenue Estimate – the BRE – has been called quite optimistic by many commentators, especially given the dramatic decline in the price of crude oil. But the release of revenue collections for January indicates his estimate might not be optimistic enough.

Chart 1 shows the year-to-date (YTD) growth rate in tax collections for FY10 through FY15, and both the estimated growth rates from the Certified Revenue Estimate (1.8 percent) released in December 2013, and the current BRE (1.6 percent). Check out the fact that YTD growth in tax collections (6.8 percent) is 325 percent greater than the estimated rate (1.6 percent). The YTD growth rate in total state revenue (8.1 percent) is 80 percent greater than the estimated growth rate (4.6 percent).

The latest estimate of state tax collections are projected to grow by 1.6 percent in FY15 and then increase by 2.4 percent in fiscal 2016 (FY16) and 5.6 percent in FY17. Total net revenue is expected to increase by 4.6 percent in FY15, increase by 1.7 percent in FY16 and then decrease by 1.9 percent in FY17.

The complete column from Dr. Stuart Greenfield, Ph.D., can be found in the R&D Department.

By Stuart Greenfield, Ph.D.