Begins New Year with $8B Surplus
Legislators in Texas, the biggest energy producer among U.S. states, will begin deliberating its next two-year budget with a surplus forecast today to match an $8.8 billion record set in 2007.
The Texas economy has topped budget projections over the past 15 months, as booming energy output fueled job growth and an 11 percent fiscal first-quarter gain in sales-tax receipts, the biggest source of general-fund revenue. Even after paying off $7 billion in health and school bills, Comptroller Susan Combs said today that the state will be flush heading into 2014.
Lawmakers, who convene tomorrow for a five-month session, in 2011 put off about $4.7 billion in future Medicaid costs and $2 billion for public schools under the current budget, and now must pay those bills...
Republicans hold all statewide elective offices and run the Legislature. Party leaders don’t want Texas to revert to a pattern that prevailed from 1990 to 2010, when spending rose at twice the pace of population and per-capita income growth, said Talmadge Heflin, a fiscal policy analyst for the Texas Public Policy Foundation, a nonprofit group that promotes limited government.
Governor Rick Perry, a Republican who has held the office since December 2000, wants to tighten limits on spending growth, and opposes new levies or tax increases, according to a “budget compact” he released in April. Disciplined spending policies have helped Texas retain top credit grades from Moody’s Investors Service and Fitch Ratings.
“Today’s revenue estimate is more evidence that we made the right decisions two years ago by budgeting carefully to meet the challenges of the national recession,” Perry said in a statement.
As the taxable value of oil produced in Texas surged to $39.1 billion in 2011 from $18.4 billion in 2009, the state led the nation in employment gains, adding about 700,000 jobs, according to data compiled by Bloomberg. The state unemployment rate has tumbled to a four-year low of 6.2 percent. Oil and natural-gas drilling rigs more than doubled by mid-2012 compared with two years earlier, and the industry’s workforce climbed 9.2 percent, Combs said.
Combs, a Republican, estimated that the state will have $101.4 billion available for general-purpose spending over the next two years, or 12 percent more than was forecast for the current biennial budget. The forecast sets a cap on how much money lawmakers can use in the new spending plan.
Sales-tax receipts have risen at “an amazing trajectory” since touching a low in 2010, Combs said at a briefing. The pace will slow to 2.4 percent in 2014 and then rebound to 5.9 percent in 2015, she said. She cautioned that single-family housing permits are increasing modestly, while businesses may cut spending because of gridlock in Congress over the federal debt.
READ FULL SOURCE ARTICLE: 01/07/2013
Editor's Note: Cutting taxes and investing in natural resource energy actually creates jobs and prosperity? Now, who would have thought...not Progressives, that's for sure!
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