State Tax Revenue Expected to Drop
As foreign demand for oil and gas falls, state tax revenues are expected to go down as well. Photo by Lizzie Chen/KUT News.Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Lawmakers overseeing the Texas state budget heard some disappointing news today — that the state’s tax revenue is expected to drop.
Mike Reissig with the comptroller’s office explained the situation this morning to the state’s Legislative Budget Board.
“The strong growth we’ve seen this year – we don’t expect that to continue,” Reissig said. “We think the economy is still going to be good and strong and the revenue picture is going to be good. But it’s going to cool off and slow. And then, beyond that, we also need to keep our eye on several factors that could potentially affect things.”
A couple of those things are economic problems in Europe and the slowdown of the Chinese and Indian economies. Both could potentially affect Texas’ main money makers: energy and exports. Oil and gas prices are set by global markets – and a decrease in demand could drag down Texas’ tax revenue. And, because Texas leads the nation with 17 percent of U.S. exports, when economies in other parts of the world slow down and buy fewer products, that could hurt the Texas economy more than any other state.
Fortunately, by the time legislators convene in the state capital this coming January, the state’s rainy day fund is expected to be worth more than 8 billion dollars. Lawmakers have repeatedly favored leaving the fund intact rather than dipping into it.
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