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The Certification Revenue Estimate

October 13, 2015

As you may know, my office releases a Biennial Revenue Estimate (BRE) every two years, before each regular session of the Texas Legislature. The BRE is designed to tell Texas lawmakers how much revenue will be available for general-purpose spending in the next two-year state budget period — most recently, for fiscal 2016 and 2017.

But we do another important estimate after the session ends. The Certification Revenue Estimate, or CRE, updates the BRE to reflect any new laws from the session that could affect state revenue, as well as the most current fiscal and economic data.

The CRE we recently released shows a 2.3 percent decline in our estimate of revenues available for general-purpose spending, from the BRE's $113 billion to a revised figure of $110.4 billion. The new figure primarily reflects our most current estimates of oil and natural gas prices and continuing weakness in Texas' energy sector. The state's finances remain in excellent shape, however, and we anticipate no trouble in absorbing this reduction in available revenue.

Perhaps the biggest change between the BRE and CRE estimates is our downward revision of transfers to the State Highway Fund (SHF) and the Economic Stabilization Fund (ESF) — the state's "Rainy Day Fund." The BRE estimated that each fund would receive $2.4 billion in transfers during the 2016-17 biennium; the CRE puts these transfers at about $1.7 billion each.

Even so, the ESF should have a balance of nearly $10.4 billion at the end of fiscal 2017.

Also, a proposed constitutional amendment before Texas voters in November would direct more revenue to the Highway Fund. If the amendment is approved, a portion of state sales tax and motor vehicle sales tax revenue will be deposited to the SHF beginning in fiscal 2018 and fiscal 2020, respectively.

We've created this useful infographic (PDF) featuring highlights from the CRE. You can also read our press release on the CRE, or view the full estimate.

As always, let us know how we're doing via our customer service website, Twitter or Facebook.

Thank you for all you do for Texas, and God bless,

Glenn Hegar