Transportation projects to take a hit as comptroller reduces state revenue

Texas may collect $2.6 billion less in taxes over the next two years as the largest US producer of oil’s coffers are hit by the downturn in crude prices, state officials said on Tuesday.

Hegar said the sales tax revenue for the state in September was $2.2 billion, up 1.9 percent compared to September 2014.

For that reason, the comptroller’s office gave their revised estimate earlier than it usually comes out, in December, he said.

The Texas comptroller downgraded the state’s projected fortunes Tuesday, saying he expects the state to have about $5.8 billion less in certain sources of revenue than he previously estimated because of dampened oil and gas prices.

“So let’s go ahead and update”, he said.

“The Legislature wrote a conservative budget this year so that Texas would be prepared for changing economic conditions and forecasts”, Straus said. In his first year in office, Hegar has faced the opposite problem, trying to predict how far drilling and production – and with it, state revenue – will fall due to the plummeting price of oil.

“The big worry is how schools and health care will fare” in the next legislative session, she said.

Lawmakers spent much of the session speculating whether Hegar would revise his estimate downward. “That’s their policy decision”.

Hegar’s January estimate proved to be “remarkably accurate”, according to a news release from his office.

Hegar lowered his estimate of state revenues in the overall state budget by $2.6 billion, which still leaves plenty of breathing room.

His estimates for fiscal 2016 and 2017, though, were overly optimistic by a good deal more.

In January, Hegar forecast that the price of oil would recover from a plunge late previous year, hovering between $65 and $70 a barrel throughout the current budget cycle.

The expected price of oil was around $60 per barrel on average, whereas lately it has been nearer to $45 per barrel.

In August, Sherman sales tax receipts dropped 0.28 percent, to $1.42 million, bringing the year’s total to $15.15 million. Attribute the rest, though, to his being too upbeat.

“The budget is still fine”, he said in an interview, shortly before issuing a report summing up the fiscal year that ended in August and projecting the next two.

Part of the revision is a reduction in workforce participation as baby boomers retire, he said. He says that is a testament to the diversified nature of the state’s economy. “It’s pretty unbelievable how diverse and resilient this economy has been”. But you do understand that this is a two-year budget? “The numbers are the numbers, and that was the data that we had at the time, and this is the data we had as of Thursday”. “Every single week, we try to keep on top of which numbers are moving – and where”.