A surge in sales taxes has boosted the government’s revenue by billions more than what analysts had estimated.
Texas is forecasting a record $32.7 billion budget surplus as a surge in sales taxes boosts the government’s revenue by billions more than what analysts had estimated.
The spare cash is a “result of vigorous economic growth since the end of Covid-19 pandemic restrictions, spikes in energy prices and the highest rate of general price inflation in 40 years, which have caused state revenue collections to substantially exceed what was expected,” Hegar wrote in a letter addressed to state leadership announcing the forecast.
The surplus stands in contrast to New York and California which are each expecting budget gaps in the upcoming fiscal year, though both states have strong reserves. Without a state income tax, Texas gets the bulk of its revenue from sales taxes. A smaller portion comes from levies on oil and gas production.
“This is a once-in-a-lifetime budgeting session, it’s an astonishing opportunity to prioritize spending,” Hegar said in an interview on Monday.
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