Today, Texas Comptroller Glenn Hegar revised the Certification Revenue Estimate (CRE) to project a fiscal 2021 ending shortfall of $4.58 billion which Hegar attributed to the COVID-19 pandemic and recent volatility in oil prices.
“Today’s update by Texas Comptroller Hegar on the budget shortfall shows the importance of reining in government spending without raising taxes as families across the state are struggling financially from the COVID-19 situation,” said TPPF’s Chief Economist Vance Ginn, Ph.D. “Fortunately, state leaders have already asked some agencies to find 5% savings to cover part of this shortfall, and we recommend that every agency use all efforts, including zero-based budgeting to find additional savings up to 15% by cutting wasteful and unnecessary spending. This would also alleviate the need for any more state bailouts from the federal government. By safely reopening Texas and getting people back to work and students in schools, the state will be best positioned to deal with any tax receipts shortfall while providing the best opportunities for Texans to flourish.”
The projection is a decrease from the $2.89 billion positive year-end balance originally projected in the Oct. 2019 CRE.