The Texas Model of low taxes and limited government has created an economic environment for free enterprise to soar and for individuals to have an opportunity to flourish.
As continued robust economic and job growth continue across the state, it should be of little surprise that the Texas Comptroller of Public Accounts reported a continued rise in sales tax revenue and total tax collections.
These final estimates show a $2.6 billion surplus at the end of the 2012-13 biennium and at least $2 billion more in the state’s rainy day fund compared with earlier projections. Over the last year, the Texas Comptroller notes that the state’s sales tax revenue increased by 2.8 percent in November 2013. In FY 2013, sales tax revenue increased by 7.2 percent and total tax revenue rose by 8.4 percent compared with FY 2012.
These data show that the state has clearly benefitted from robust economic growth, but the report also notes that future revenues are projected to rise:
Tax collections are expected to yield $88,256 million during the 2014-15 biennium, contributing 89 percent of total net revenues. Compared with the $81,029 million collected in the 2012-13 biennium, total General Revenue-related tax collections in 2014-15 are expected to increase by 8.9 percent.
The rise in these revenues will no doubt lead some legislators to demand more state spending; however, they should resist this temptation. If additional revenues continue to be spent, the expenditures will be baked into future spending levels and burden taxpayers in the process.
With the current trends in oil and gas tax revenues and massive oil production possibilities from the Spraberry/Wolfcamp shale formation in the eastern Permian Basin, total funds in the state’s rainy day fund could reach historic levels.
These increases in general revenue and rainy day funds will make it necessary for legislators to restrain the growth rate of state spending when they see “green” from massive tax revenues next session. Instead of increasing spending, the legislature should return these dollars to hard-working Texans. One of the best ways for this is to reduce the sales tax rate. This will continue to help the leader in job creation be the guiding light for the country.
Governor Rick Perry sums it up nicely in a recent press release:
Texas government budgets like Texas families, limiting spending and saving hard-earned dollars…What’s most remarkable is we’ve done this while passing $1.4 billion in tax cuts, and we’ve made historic investments in water and, if voters approve, roads. It’s a shame Washington still hasn’t learned, you can’t tax and spend your way to prosperity.