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Comptroller Susan Combs’ Biennial Revenue Estimate Reflects Today’s Economic Climate
Press Release

January, 2009

Texas Comptroller Susan Combs last week said the state can expect to have $77.1 billion available for general-purpose spending during the 2010-11 biennium.
“Given the continuing turmoil in the national economy, auto industry, housing and financial markets, this is a cautious forecast,” Combs said. “Our wisest course is to exercise prudence, just as Texas families are doing during the economic downturn.”

Combs’ Biennial Revenue Estimate (BRE) includes a $2.1 billion ending balance carried forward from the 2008-09 biennium, plus an estimated $76.7 billion in anticipated general-purpose revenue from taxes and other sources. Against this amount, an estimated $1.7 billion will be reserved for future transfers into the Rainy Day Fund, leaving the Legislature $77.1 billion for general-purpose spending as they write the 2010-11 state budget.

“Though Texas has avoided the worst economic impacts affecting other states, the national downturn has finally begun to touch Texas,” Combs said. “Our new economic forecast indicates Texas will be affected in fiscal 2009 before regaining economic momentum in fiscal 2010.”

Texas can expect to lose about 111,000 nonfarm jobs through the first three quarters of calendar 2009, but the trend should reverse in late 2009. Texas job growth in 2010-11 is expected to average 1.1 percent annually. In comparison, the nation’s job count could drop by an average 0.3 percent per year. Also in fiscal 2009, the annual growth rate of Texas’ gross state product is projected to be 1.8 percent and then rise slightly to 1.9 percent in fiscal 2010, before jumping to 3.8 percent in fiscal 2011.

The performance of Texas taxes will vary by economic sector. Sales taxes, for example, are expected to increase by 2.9 percent to $44.4 billion, compared to $43.1 billion in 2008-09. Motor vehicle sales taxes, a separate tax and currently being affected by declines in consumer confidence, are expected to generate $5.5 billion, down 6.5 percent compared to 2008-09. Oil and natural gas severance taxes are expected to decline 43.3 percent and 26.5 percent respectively as prices retreat from their 2008 highs. The $8.9 billion in franchise tax revenue anticipated in 2010-11 will be virtually flat compared to the $8.8 billion expected for 2008-09. Part of the flat revenue reflects weaker economic conditions caused by the national recession.

“The economic and revenue outlook for Texas during the next two years is challenging, but we have positive factors that put us in an enviable position to ride out the national downturn and emerge strong, healthy and competitive,” Combs said.

Positive factors include the fact that Texas is expected to finish the current 2008-09 biennium with $2 billion in general-purpose revenue left over to carry into 2010-11. Also, Texas has additional resources to draw upon to help pay for vital programs during the next biennium. At the end of the current biennium the Rainy Day Fund will contain $6.7 billion. The Property Tax Relief Fund used for education funding will enter the upcoming biennium with a $3 billion beginning balance.

In the 2008-09 biennium, $86.2 billion in revenue for general-purpose spending was available. The amount of available dollars for 2010-11 is lower for several reasons: the $2 billion ending balance carried forward from the 2008-09 biennium is significantly less than a $9 billion ending balance two years ago; and the slower economy will generate slightly less tax revenue during the 2010-11 biennium compared to 2008-09.

“Our Biennial Revenue Estimate is conservative, a policy that has served Texas well and is especially appropriate for the current economic climate,” Combs said. “We will continue to monitor the national economy and its impact on Texas very closely, and we will update the Legislature immediately if our revenue projections change.”
The full Biennial Revenue Estimate is available on the Comptroller’s Web site at


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