State officials wrangle with the impacts of the pandemic on the state budget

A macro shot of the words “state budget” with hundred dollar bills.

This week, the Legislative Budget Board (LBB) set the spending limit for appropriations for the remaining 2020-2021 biennium. Texas Comptroller Glenn Hegare estimated a $4.6 billion budget shortfall for 2020. Comptroller Hegar indicated that the budget outlook was somewhat better than the July estimate. How this plays into school funding remains to be seen as the Legislature develops a budget this spring, and Texas AFT will be at the forefront in demanding that we retain our investment in public education.

Hegar said some of the decline in the state’s revenue was offset by increased online sales tax collections. General revenue for the state is still down significantly from last year due to the economic downturn brought on by the COVID-19 pandemic; Texas has seen slower economic growth as a result. 

Under the Texas Constitution, spending on appropriations from the state’s general revenue can’t exceed the growth rate of the state’s economy. That estimated growth rate from the 2020-21 biennium to the 2022-23 biennium is 7.06%. The appropriations for the 2020-21 biennium from state tax revenue not dedicated by the Constitution is $98.8 billion and is subject to adjustments resulting from the revenue forecast or subsequent appropriations certified by the comptroller. As a result, the spending limit on appropriations that can be made for the 2022-23 biennium from state tax revenue not dedicated by the Constitution, without a special concurrent resolution, is $105.8 billion. This is a much lower limit than the Legislature had to work with last session. Hegar said that his office will have the new budget revenue estimates for the remainder of the current budget cycle to the LBB for the start of the legislative session in January.