When the state legislature convenes again in Austin, they will have a serious budget deficit to contend with due in large part to the Chinese coronavirus shutdowns that have strangled the state’s economy.

A report from Comptroller Glenn Hegar reveals that in October, sales tax collections were down 3.5 percent over the same period last year.

“October sales tax collections from all major economic sectors declined significantly from year-ago levels, with the exception of collections from retail trade,” said Hegar.

“The steepest declines were in receipts from oil- and gas-related sectors, with the rate of well drilling activity depressed almost 75 percent from the previous year.”

In total, the state collected $2.7 billion in sales taxes during the month of October. 

The state also collected the following revenue from other major taxes:

  • motor vehicle sales and rental taxes — $455 million, down 6.1 percent from October 2019;
  • motor fuel taxes — $286 million, down 8.3 percent from October 2019;
  • oil production tax — $200 million, down 42.2 percent from October 2019;
  • natural gas production tax — $57 million, down 32.9 percent from October 2019;
  • hotel occupancy tax — $33 million, down 33.3 percent from October 2019; and
  • alcoholic beverage taxes — $88 million, down 24.2 percent from October 2019.

In July, Hegar revised his biennial revenue estimate to project lawmakers would face a $4.6 billion budget shortfall when they return to Austin, though he cautioned that prediction comes with “an unprecedented amount of uncertainty.”

Passing a balanced budget is one of the state legislature’s only constitutional obligations. Lawmakers will have to grapple with the shortfall in 2021 by either raising taxes or reducing spending.

Brandon Waltens

Brandon serves as the Managing 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

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