Texas announces record $33B budget surplus

Jan. 11 (UPI) -- Texas has amassed an extra $33 billion to spend during the 2024-2025 fiscal year in a record-breaking budget surplus funded by the state's sales and oil taxes.

Texas Comptroller Glenn Hegar says Texas is projected to have $188.2 billion available in general revenue for funding the state, which is a 26% increase from the last budget cycle.

"The amount of projected revenues give the state a remarkable, a truly once-in-a-lifetime opportunity, for historic actions in this legislative session," Hegar said in his biennial revenue estimate to state lawmakers Monday before the first day of the 88th Texas legislature.

Hegar credits "vigorous economic growth," inflation and gas prices for the surplus that was also boosted by $32.7 billion remaining in state coffers from the 2022-2023 biennium.

In July, Hegar had estimated the surplus at $27 billion, but said it grew due to inflation and higher sales tax revenues.

Despite the hefty surplus, Texas state law prevents lawmakers from spending the large sum without legislative action to bypass current spending limits.

Hegar said while the budget estimate reflects the state's strong economic rebound as it recovers from the COVID-19 pandemic, he reminded lawmakers that it is also a time of economic struggle for Texas taxpayers.

"We cannot and will not lose sight of the fact that every tax dollar received by the state is coming out of taxpayers' pockets," Hegar said as he urged frugality.

"I must advise some caution as these decisions are made. Bluntly, don't count on me to announce another big revenue jump two years from now," Hegar said. "It's important to be able to maintain some type of reserve fund."

The majority of Texas state revenues comes from sales taxes, with additional revenues from oil and gas severance taxes and franchise taxes collected on alcohol.

Texas' leaders offered their ideas for the budget windfall, including Republican Gov. Greg Abbott who pushed to reduce property tax burdens on homeowners and to help secure the border if the federal government fails to act.

Lt. Gov. Dan Patrick wants the surplus used to secure the state's electrical grid and water system.

Texas House speaker Dade Phelan is calling for infrastructure investments, in addition to property tax relief.

And the executive director of the Texas Public Employees Association, Ann Bishop, argued lawmakers should consider helping government employees, saying "state workers have not seen a general pay raise since 2014."