January 4, 2001The Honorable Rick Perry
The Honorable Rodney Ellis
The Honorable James E. "Pete" Laney
Members of the 77th Legislature
Fellow Texans:
In accordance with Article III, Section 49a of the Texas Constitution, I present herewith my revenue estimate for the remainder of fiscal 2001 and the upcoming 2002-03 biennium.
In terms of general revenue-related funds, in 2002-03 the state will have $5.1 billion more than the amount appropriated for 2000-01. All totaled, the state will have approximately $60.8 billion in funds available for general-purpose spending. Of this amount, $2.9 billion will come from balances on hand at the close of the 2000-01 biennium, after setting aside a required $327 million transfer to the Economic Stabilization ("Rainy Day") Fund. The state’s strong ending balance is the result of better than expected economic growth and more efficient governmental operations during the 2000-01 budget cycle.
Approximately 86 percent of general revenue-related funds will be provided by tax revenue collected during the 2002-03 biennium. Almost 61 percent of this tax revenue will come from the sales tax. Other significant sources of general revenue include motor vehicle sales taxes, the franchise tax, the natural gas tax, insurance premium taxes, and lottery proceeds.
In addition to the general revenue-related funds, the state will collect $48.5 billion in federal receipts and other revenues dedicated for specific purposes and therefore unavailable for general-purpose spending. State revenue collections from all sources and for all purposes will total $106.8 billion.
Shortly after the close of the 2002-03 biennium, Texas will have just over $1 billion in its Rainy Day Fund.
This estimate is based on my current economic forecast, which indicates that, consistent with the national trend, economic output in the state will continue to moderate in the next biennium, dropping from an average annual growth rate of 5.4 percent each year in 2000-01 to 4.1 percent each year in 2002-03. In contrast, the state enjoyed a 6.4 percent average annual economic growth rate in 1998-99. Even at the slower rate, however, the state economy can be expected to outpace national growth by more than half a percentage point annually over the three-year projection period.
I shall continue to monitor the fiscal situation and report to you as necessary.
Sincerely,
Carole Keeton Rylander
Comptroller of Public Accountsc: John Keel, CPA, Director, Legislative Budget Board
