Texas lawmakers will return to Austin on Tuesday with an estimated $32.7 billion budget surplus for the fiscal year 2024-2025, even more than the record posted last year.
State Comptroller Glenn Hegar announced a renewed budget surplus ahead of the first day of the 88th Texas Legislature.
He also announced that in fiscal year 2024-2025, the state’s total revenue will be $188.2 billion, up 26% from the previous biennium.
“This is really the only legislative session ever for budgeting and prioritizing that the Legislature might want to fund,” Hegar said.
He said lawmakers should consider spending the money on the state’s power grid, port and water infrastructure, and higher salaries for teachers and nurses.
Hegar warned lawmakers about the risk of money being misused.
“Honestly, don’t count on me announcing a big revenue jump in two years,” Hegar said. “The revenue we received was unprecedented in many ways.”
In July, Hegar estimated a $27 billion surplus. But on Tuesday, he said it was up due to inflation and higher sales tax revenues.
Spending limits restrict how much of the surplus Texas legislators can spend. Hegar said that means lawmakers will either have to keep some of the money in the treasury for future use, use a different spending mechanism, or breach the spending cap. (The latter is unlikely to happen, Hegar said.)
The Conservatives said the money should go towards providing property tax breaks. Meanwhile, progressive groups have said the money should be used to better fund public education, including increasing public funding per student.
Lieutenant Gov. Dan Patrick said in a statement Monday that “Texas taxpayers need to get tax breaks first before we make any new spending.”
“Besides, we don’t have to spend all the money,” Patrick said. “We must have a responsible reserve in case Joe Biden’s inflationary policies and uncontrolled spending cause a national recession in 2023 and 2024.”
But Dick Lavin, senior tax analyst at the leftist think tank Every Texan, said the Legislature has already put in place mechanisms that limit the rate of tax increases.
He said the Legislature should not continue to cut taxes.
“But what you can do to ease the pressure that homeowners and small businesses are under is to make sure everyone pays their fair share of property taxes,” Lavigne told reporters after the Comptroller’s statement.
Lavigne proposed implementing “selling price disclosure”. This will require the disclosure of real estate sales so that the correct property tax can be collected.
Lavigne also said the Legislature could use some of the money to increase the core appropriation — or funding per student. This would guarantee higher salaries for teachers, consultants, librarians and nurses.
Meanwhile, Ann Bishop, executive director of the Texas Association of Public Employees, said lawmakers should also consider providing assistance to public employees.
“Public employees have not seen a general pay increase since 2014,” Bishop said in a statement. “With the state’s historic surplus, this is the perfect time for overdue investment in those Texans who are at the forefront of providing needed services across Texas.”
The Texas Legislature is due to begin its new session at noon Tuesday.
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