The Texas legislature has one constitutional mandate every session: to pass a balanced budget.
Tax collections on motor vehicles were up from December 2019, which may be explained by consumers taking advantage of low interest rates and purchasing a new vehicle for Christmas.
The legislature cannot appropriate higher than a seven percent increase in general revenue spending for the next biennium when the body convenes in January.
State leaders called on some Texas agencies to trim budgets by 5 percent after numbers from the comptroller’s office showed tax revenue down $989 million this April compared to 2019.
With tax revenues declining, cities and counties may look to raise property taxes above the 3.5 percent threshold instituted by SB 2 thanks to a loophole in the law.
The request sent to most state agencies anticipates a shortfall in the state's revenue due to the coronavirus pandemic and government-mandated lockdown.
Because of the statewide disaster declaration, local taxing entities will be able to raise property taxes above the thresholds instituted by SB 2.
Texas could face a significant revenue shortfall that would disrupt the ability of the state government to fund its $248 billion biennial budget.
