State's Economic Engine Improving
Last month I reported to the 2005 Legislature that the state will have $64.7 billion in general revenue available for my certification of the budget for the 2006-07 biennium. Revenue available from all funds of state government, including federal funds, will total $130.5 billion.
The 2005 Legislature will have $6.4 billion more in general revenue than was appropriated by the 2003 Legislature. However, $6 billion of that new money would be needed to maintain today's spending levels through fiscal 2007, leaving a scant $400 million extra over the next two years.
Texas has rebounded from the shocks that confronted it the last time I presented the biennial revenue estimate. Our state's great economic engine is improving. We have experienced 16 months of positive sales tax growth, and seven of the 10 economic indicators I watch every day are up.
I expect to see a continuation of growth trends in 2005 and into the next biennium. Growth in the economy reflected in my estimate will be solid and sustained. I am projecting growth in the gross state product of 3.5 percent in fiscal 2005, and of 3.2 percent in both 2006 and 2007.
I estimate that by the end of this fiscal year the state's Rainy Day Fund balance will have grown to $715 million. And the fund's balance will climb to more than $2 billion by the end of fiscal 2007. I renew my call on the Legislature to allow this balance to grow to $3 billion--only 5 percent of our general fund balance and the minimum needed for a reliable source of cash in case, God forbid, we have a natural disaster or terrorist attack in our Lone Star State.
I will continue to fulfill my constitutional responsibility to monitor the performance of the economy and the state revenue system and report any changes, positive or negative, to the 2005 Legislature and the governor as quickly as possible.
Carole Keeton Strayhorn