Texas enters budget cycle with nearly $24B surplus

AUSTIN (Nexstar) — For the second time in a row the Texas Legislature will enter a new session with a significant surplus that will boost the amount of money they have for the next budget. Glenn Hegar, the Texas Comptroller, announced Monday afternoon the surplus is nearly $24 billion.

This cycle’s $23.76 billion surplus is less than the $32.7 billion the state started with last session, but the money available is still very robust.

“The legislature can take pretty significant bites out of several major issues, but it’s hard to swallow one at one time,” Hegar explained during the Biennium Revenue Estimate announcement. Hegar added the surplus Monday is thanks to the decisions made by the legislature in the past session, deciding to spend money on one-time expenditures.

Lawmakers will now have to make similar decisions in this upcoming session to capitalize on the extra funds. Lt. Gov. Dan Patrick announced on Monday his focus for the surplus is to continue property tax cuts and raising salaries for teachers. He added he wants to make more one-time investments that “ensure our budget is sustainable moving forward and that our state is prepared for the future, as we did with last session’s surplus.”

House Democratic Caucus Chair Gene Wu called for funding neighborhood schools and healthcare. One expert said the surplus gives lawmakers a golden opportunity to address infrastructure issues impacting Texans like water, energy and broadband.

“We have an opportunity to start taking big meaningful steps in terms of like how to fund our water infrastructure, water supply challenges that we are anticipating over the next few decades,” Rahul Sreenivasan, the director of government performance and fiscal policy at Texas 2036, a nonprofit and nonpartisan public policy research group.

Sreenivasan said it will be fiscally responsible to take small steps addressing these issues now rather than wait to address them on the back end when they will cost even more. Hegar said the decisions lawmakers make in the next six months must balance the state’s needs in the present while also keeping the economy moving into the future.