The Honorable Rick Perry, Governor
The Honorable David Dewhurst, Lieutenant Governor
The Honorable Thomas R. Craddick, Speaker of the House
Members of the 78th Legislature
Fellow Texans:
In accordance with Government Code Section 403.0131, I present herewith my revenue estimate that provides the basis for my certification of state revenues to cover expenditures for the 2004-05 biennium. After accounting for balances on hand at the close of the 2002-03 biennium, total General Revenue-related funds will be $58.44 billion.
Total General Revenue-related receipts in 2004-05 will be $58.41 billion. Upon adding another $59.7 billion in federal grants and other non-General Revenue-related funds, total estimated receipts for all funds will reach $118.1 billion.
Of the $58.4 billion in General Revenue-related receipts, $49.1 billion will come from taxes, and $9.3 billion will be collected in non-tax revenue. The sales tax will contribute $30.0 billion- 61 percent of all state tax collections; motor vehicle sales and rental taxes will generate $5.7 billion (12 percent of state tax collections); and franchise tax revenues are expected to provide $3.7 billion (7 percent of state tax collections).
The economic forecast that provides the basis for many of the calculations contained in this estimate reflects the expectation that sustained state economic growth will slowly emerge from the slowdown that characterized the past two years. Texas' Gross State Product is expected to increase at an average annual rate of 4.0 percent, up significantly from the 2.3 percent growth rate for the 2002-03 biennium. The state's non-farm employment is expected to register a 2.0 percent average annual increase during the biennium, comparing favorably with the flat performance in the last biennium.
I shall continue to track the state's economic and revenue picture as the biennium progresses and keep you informed of any substantive changes in the state's fiscal health.
Sincerely,
Carole Keeton Strayhorn
Texas Comptroller
c: John M. Keel, CPA, Director, Legislative Budget Board