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Comptroller's Report

Dear Readers:

10 Principles for Texas
in the 21st Century
  1. Develop a better-educated workforce
  2. Direct more of every education dollar into the classroom
  3. Raise the bar on student performance
  4. Cut taxes in Texas
  5. Introduce competition into Texas government
  6. Improve government performance and accountability
  7. Reduce the size of government
  8. Bring common sense to regulations
  9. Use technology to cut costs and increase quality
  10. Return control to communities and individuals

When I sent the cities and counties their sales tax allocations early last December, I promised “This year, the Grinch isn't going to steal Christmas.” That proved exactly right. And it was just the beginning.

A rebounding Texas economy, a successful tax amnesty program conducted by my office and strong tax collections from oil and gas companies drove the state’s fiscal 2004 general revenues $1.8 billion above those of 2003.

We closed the state’s books August 31, and I can tell you that fiscal 2004 was truly an economic bumper crop of a year for Texans. By year-end, nine of my 10 leading economic indicators were pointing up and we had enjoyed 12 straight months of state sales tax gains.

The Texas economy has fought back, and I predict our state will outpace the nation by increasing strides. This fiscal year, Texas gross product growth will edge that of the nation by a tenth of a percent; this will grow to eight-tenths by fiscal 2006, then to over a full point each year by 2008 and 2009. Texans won’t be stopped in their drive for a greater future.

I am also pleased to announce that our state’s Rainy Day Fund has grown to $878.5 million due to a surge in tax collections that Texas natural gas producers pay to the state. I believe, however, that the Rainy Day Fund balance remains well below where it needs to be. We should build it to at least $3 billion, which would be just 5 percent of our state’s general revenue budget. The money in the Rainy Day Fund should only be used for a true emergency. Texas government needs to budget like any hard-working Texas family—spend wisely, invest wisely and save for a rainy day.

Our fiscal plowhorses are pulling strongly for now, but no one should forget the events that struck suddenly in the last budget cycle. I will not make any premature revision to the official revenue. With half the biennial acreage still left to plow, I will continue to monitor the situation and will keep all Texans advised as to our fiscal progress.

Thanks for all that you do for Texas.

Sincerely,

Carole Keeton Strayhorn's Signature
Carole Keeton Strayhorn
Texas Comptroller