Speaking to the Legislative Budget Board this morning, Texas State Comptroller Glen Hegar released a revised revenue estimate of $110 Billion, down from his estimate last October of $121 Billion. In October, long before the impact of the Covid-19 pandemic began to impact state revenues, Hegar projected a $2.9 billion surplus. Today, he projected a $4.58 billion deficit.
The Texas Legislature regularly underfunds expenses like Medicaid in balancing the budget for the biennium. A supplemental budget is then approved in the next legislature to ensure that the budget is balanced. Hegar was clear that his $4.58 billion deficit did not include any amount that the legislature underfunded in the budget passed in the last session.
The fiscal biennium affected ends September 30, 2021. The deficit will have to be addressed by the 87th Texas Legislature which gavels in on January 12, 2021. Shortly before that time, the Comptroller is required to make an income projection for the next biennium which begins in October 2021.
Comptroller Hegar said “We have had to make assumptions about the economic impact of COVID-19, the duration and effects of which remain largely unknown. Our forecast assumes restrictions [on businesses and people] will be lifted before the end of this calendar year, but that economic activity will not return to pre-pandemic levels by the end of this biennium.”
Note: the Texas Legislature meets every two years so the budget drafted is for a two-year period or for a “biennium.”