Texas’ brand new comptroller, Glenn Hegar, took center stage this morning to announce the biennial revenue estimate for Texas. A lot of state officials watched or listened live. Others paused for a moment and check their phone.
The comptroller’s revenue estimate is one of the legislative session’s most important moments—despite the fact that it occurs before the legislature officially convenes because the comptroller’s estimate become the limit on how much the legislature can plan on spending over the next two years. It is possible to appropriate more than the estimate, but very few Texas legislators are interested in taking a stand for spending more.
This is an especially important moment for Glenn Hegar. Some conservative will take their measure of Hegar’s ideology today because they want a low estimate that will constrain legislative spending. Others will take their measure of his technical competence in the years to come based on the accuracy of the estimate.
This is an especially tough year for having your credibility based on budget projections. The national economy is beginning to show more signs of strong growth. However, volatile oil prices have an impact very directly on the state’s taxes on oil production tax revenue and indirectly through the general sales tax that rises and falls with the state’s economy overall.
Making an accurate prediction of state revenues for the next several years is a nearly impossible task that will subject to all kinds of scrutiny. In the days and years to come, Hegar will be subject to all kinds of criticism for this projection.