Texas economy to outpace nation
In April, Texas Comptroller Carole Keeton Strayhorn unveiled the spring 2004 state economic forecast. The forecast calls for the continuation of slow to moderate growth in 2004 with considerable improvement in 2005.
During 2004 and 2005, the overall Texas economy, as measured by real, inflation-adjusted gross state product, will grow at a healthy 4.2 percent annual rate--up from the 2.9 percent growth rate from 2002-03--and above the national gross domestic product growth rate of 3.9 percent.
"Texas will continue to outpace the national economy," Strayhorn said. "Our Lone Star state bootstrap mentality has allowed us to "conquer and not perish" during these recent, tough economic times."
After an anemic three years, statewide personal income growth is expected to rise to a healthy 5.6 percent per year in 2004-05. More importantly, after falling for three consecutive years, statewide real per-capita income, after adjusting for inflation, will increase by 2.4 percent in 2004 and by 2 percent in 2005, meaning the standard of living for the average Texan once again will be on the rise.
Strayhorn identifies $1.2 billion available over next three years
Texas Comptroller Carole Keeton Strayhorn told legislators in April she has identified $1.2 billion that can be used to address the school finance crisis over the next three years by simply closing two tax loopholes.
"This money is real," Strayhorn said. "While this will not solve the school funding problem, it will most certainly help legislators as they grapple with this crisis."
Strayhorn said an additional $130 million a year would be available if legislators closed the so-called Geoffrey loophole, and an average of $281 million a year over the three-year period would be available if legislators closed the so-called Delaware Sub loophole.
The Geoffrey loophole diverts income out of the reach of Texas' franchise tax, and The Delaware Sub loophole diverts income from Texas by routing corporate profits through Texas partnerships and Delaware-based holding companies.
Strayhorn recommends tobacco settlement fund distribution
Texas Comptroller Carole Keeton Strayhorn announced in April that she is recommending a distribution of $28.5 million from the Tobacco Settlement Permanent Trust Account.
The $1.8 billion fund, which was built up from payments under the state's tobacco settlement, provides annual distributions to Texas political subdivisions and hospital districts. The Comptroller is authorized to manage and oversee the fund, with the advice and counsel of the 11-member Tobacco Settlement Permanent Trust Account Investment Advisory Committee.
"I am pleased to announce that because of solid investment performance and oversight by the committee and by my staff, this year I am recommending a distribution of $28.5 million, a 29 percent increase over last year's distribution," Strayhorn said.
If adopted by the committee, this would be the largest distribution from the fund.
State tax collections soar
Texas Comptroller Carole Keeton Strayhorn said in April that the state received $1.18 billion in sales tax revenue in March, a 17.2 percent increase compared with March 2003.
"This tremendous jump is a direct result of my recommendation to the Legislature to have a tax amnesty plan to bring dollars into our state coffers," Strayhorn said.
Returns from "Project: Pay Up," a tax amnesty period from March 11-31, helped boost sales tax revenue. Project: Pay Up generated $379 million for the state. During the amnesty period authorized by the 2003 Legislature, businesses owing delinquent taxes had an opportunity to pay their tax debt without facing penalties and interest normally assessed against delinquent taxpayers.