When state lawmakers return to the Texas Capitol on Tuesday, they will have a nearly $1 billion shortfall to address, according to Texas Comptroller Glenn Hegar.

That projection was part of Hegar’s biennial revenue estimate, which he released on Monday. Hegar says the decline was a “direct result of the COVID-19 pandemic,” which caused revenue to fall “well short” of expectations since lawmakers passed the 2020-2021 budget two years ago.

The $950 million shortfall is tamer, however, than Hegar’s projections from last summer, in which he said a $4.6 billion revenue shortfall could be possible. 

In addition to the shortfall, Hegar projected that the state would have $112.5 billion in revenue available for general-purpose spending during the coming 2022-23 biennium.

That represents a 0.4 percent decrease from what was available ahead of the previous biennium.

“As is always the case, this estimate is based on the most recent and precise information we have available,” said Hegar. “It represents our efforts to provide lawmakers with the most accurate forecast possible as they craft the budget for the 2022-23 biennium and the supplemental spending bill to address the remainder of the current biennium.”

Hegar also noted, however, that the estimate was still “clouded with uncertainty” due to the economic effects of the coronavirus.

“The ultimate path of the pandemic and the behavior of consumers and businesses during a resurgence are difficult to gauge. It’s also unclear how they’ll respond once the pandemic is fully under control,” said Hegar. “As a result, there is a wide range of possible outcomes for state revenue through the end of fiscal 2023, with the possibility of revenue falling short of this forecast but also a chance revenue could exceed it, perhaps substantially.”

Hegar also warned lawmakers against increasing spending, saying they would have to face a “difficult choice” when balancing the budget.

“While savings from agency spending cuts and federal funding could help erase the projected shortfall for this biennium, a substantial supplemental appropriations bill could increase it, thereby reducing revenue available for the next biennium,” said Hegar.

Passing a balanced budget is one of the state Legislature’s only constitutional obligations. The Legislature will reconvene for the 87th session at noon on Tuesday, January 12.

Brandon Waltens

Brandon serves as the Senior Editor for Texas Scorecard. After managing successful campaigns for top conservative legislators and serving as a Chief of Staff in the Texas Capitol, Brandon moved outside the dome in order to shine a spotlight on conservative victories and establishment corruption in Austin. @bwaltens