September 27, 2016 5:57 PM

Budget choices lead to heavy constraints of general revenue next session

The state sits on a $4.1 billion cushion between revenue and appropriations, most of it in general revenue-dedicated funds…but that budget will be constrained to $2 billion due to constitutional budget spending limits, according to the Comptroller and LBB

The revenue picture for next session is tightening quickly given the choices lawmakers made last session to obligate future revenue to address ongoing needs, budget writers were told this week.

Tom Currah with the Comptroller’s Office and Ursula Parks of the Legislative Budget Board presented current revenue, and its constraints, in an overview before Rep. Dennis Bonnen’s, R-Angleton, House Ways and Means Committee. The outline of the picture includes funds gathered, revenue obligated and an anticipated supplemental budget that must draw down the balance of current biennial revenues.

Currah, the chief revenue estimator in Glenn Hegar’s office, noted the slowdown in oil and gas severance taxes, which will bring in about $1 billion less than last fall’s revenue forecast. When combined with a $350 million bump in franchise taxes, that brings the final tally to about $50.8 billion in revenue, which would be $650 million under projections.

As Bonnen pointed out, some of that $350 million bump is based on revenue from a tax rate that was reduced last session. That means some of that revenue will go back out to business owners in the form of refunds, although Currah expects to keep some of that excess.

By Kimberly Reeves