Texas State Comptroller Glenn Hegar, in his post Legislature recap of the state's finances, says the 'diversity of the Texas economy' and the new strength of the Texas oil and gas industry will combine to improve the state's budget picture going into 2018. But Hegar warns that the costs of Hurricane Harvey recovery could lead to additional expenditures, News Radio 1200 WOAI reports.
Hegar late Tuesday released what is called the Certification Revenue Estimate' for the budget approved by the Legislature in the regular session.
"We are continuing to project steady expansion of the Texas economy, following a brief slowdown due to the storm's impact," Hegar said in his report. "Factoring in recent legislative activity, this CRE presents slightly higher revenue forecasts for the 2018-2019 biennium than those we released in January."
Hegar says the key is that both the State Highway Fund and the Economic Stabilization Fund, usually referred to as the 'Rainy Day Fund' are again seeing increases in funding due to growing oil and gas severance taxes.
Hegar says that Rainy Day Fund increase will be critical because that is the fund that is likely to be tapped to pay for as much as $2 billion in Harvey recovery.
Hegar also says the 2015 Constitutional Amendment which directs that up to $2.5 billion in annual state sales tax revenue in excess of $28 billion be transferred into the highway fund will not lead to contributions to highway construction until September of 2018.
"In addition to market turbulence, energy price fluctuations, and potential changes in national economic policy, the impact of Hurricane Harvey contributes some uncertainty to this estimate," Hegar said.