Texas Comptroller Glenn Hegar discusses state budget, economic planning

Texas Comptroller of Public Accounts Glenn Hegar shared details on the state's financial situation ahead of the 2021 legislative session during a Transportation Advocacy Group virtual event. (Screenshot via Transportation Advocacy Group)
Texas Comptroller of Public Accounts Glenn Hegar shared details on the state's financial situation ahead of the 2021 legislative session during a Transportation Advocacy Group virtual event. (Screenshot via Transportation Advocacy Group)

Texas Comptroller of Public Accounts Glenn Hegar shared details on the state's financial situation ahead of the 2021 legislative session during a Transportation Advocacy Group virtual event. (Screenshot via Transportation Advocacy Group)

Texas's upcoming legislative session will likely be one of the most challenging in recent years for lawmakers as they seek to address the state's expected fiscal shortfall and plan for its next budget, according to Texas Comptroller of Public Accounts Glenn Hegar. According to the comptroller’s office, Hegar oversees Texas' finances and serves as the state’s treasurer, tax collector, accountant and revenue estimator.

During a Sept. 10 virtual presentation through the Houston-based Transportation Advocacy Group, Hegar discussed the state's present financial situation and the uncertainty surrounding planning for the future through the ongoing coronavirus pandemic.

Financial planning

Texas's most recent fiscal year ending Aug. 31 had started out on strong footing before the economic effects of the pandemic including rising unemployment and lost tax revenue were first felt, Hegar said.

"Back in February, we were slightly tracking ahead of revenues coming into treasury than we had anticipated when we gave our last revision to our revenue estimate last October," he said. "Texas entered into this downturn in a much stronger foundation and footing than many other states, which has obviously helped the state of Texas."


Despite that start to the state's two-year budget cycle, Hegar said the current fiscal outlook following several months of economic downturn related to government restrictions and consumer reactions quickly shifted from a surplus to a deficit—although some state-imposed spending reductions are expected to slightly curb the shortfall.

“We went from $3 billion surplus in the current two-year budget to what now is estimated to be a $4.6 billion deficit. Now, part of that is going to be lessened because state leadership instructed agencies to reduce their expenditures," Hegar said. "That probably saves about $1 billion, which is not taken into account for the $4.6 [billion deficit] because those dollars are retained in the treasury."

Additionally, Hegar said around $13 billion, including around $6.2 billion related to COVID-19, was sent from the federal government to support the state this year—although some spending requirements on that funding are in place.

“Most other states are in a lot worse cash situation than the state of Texas. Texas can cash flow; we have a lot of tools in the toolbox," Hegar said. "However, other states are either trying to get Congress to pass on additional funding as they have in prior recessionary times, and/or loosen the requirements that are put on the dollars that we’ve got.”

Resident and business response

A key to boosting the state's revenue and economic improvements in the years ahead will depend on the response of consumers, who may be averse to continue spending following increased activity this spring, Hegar said.

“Some of the data we’ve seen and researched is that peoples’ reluctance or hesitancy to engage in the economy is more out of concern and fear than it [is] of government-mandated shutdowns," he said. "Even with the removal of government-mandated shutdown we still have a lot of work to do to instill confidence in the consumer to engage in the economy."

Texas consumers spent well over $7.3 billion on expenses in and around their homes during May and June, according to recent data covering economic activity in those months, which Hegar said represent an increase over the same time last year. Those results were likely brought on by new habits such as residents working from home or cutting back on vacations, he said, as well as the utilization of federal stimulus check dollars and additional unemployment benefits. That uptick is expected to wane in the coming months, however, and continued spending will be contingent on consumers' comfort levels and uncertain factors related to COVID-19.

“We see the economy growing, but we think it’s going to take a while, unfortunately, to reach pre-pandemic levels," Hegar said.

Economic recovery will also be backed by the commercial sector. Imports and exports continue to represent a large portion of Texas' own gross state product, and Hegar said Texas remains the top exporting state in the U.S., which ties economic recovery to international trends as well. In Texas, corporate relocations and business growth are also faring better compared with urban areas elsewhere in the country, and are expected to continue bringing new residents and revenue to the state.

"If you look at companies wanting to move and/or expand in Texas, that is continuing. That hasn't stopped," he said. "If you’re in the real estate market in New York, Chicago, L.A., you have big concerns. But if you’re in Texas, Texas is still attracting and so therefore that growth is going to occur. It may be a little more moderate compared to what we had in the past; however, it’s still going to occur."
By Ben Thompson
Ben joined Community Impact Newspaper in January 2019 and is a reporter for The Woodlands edition.


MOST RECENT

Several named storms have brought heavy rainfall to the Houston area during the 2020 hurricane season amid the coronavirus pandemic. (Courtesy Adobe Stock)
In the midst of 2020’s economic downturn, Harris County continues to consider social vulnerability when prioritizing flood mitigation projects

Zoning expert and law professor Sara Bronin explained how marginalized populations can find themselves in a “vicious cycle” when government agencies do not take steps to protect them from flooding.

Voters line up outside Juergen's Hall Community Center in Cypress on Oct. 14. (Shawn Arrajj/Community Impact Newspaper)
Harris County exceeds its previous voter turnout record before early voting ends

More than 1.3 million county residents cast ballots throughout the entire November 2016 election, but this year, that number was surpassed on Oct. 29—with one day of early voting remaining in addition to Election Day on Nov. 3.

More students have opted to enroll in face-to-face learning in the second grading period of the 2020-21 school year in Tomball and Magnolia ISDs. (Community Impact staff)
Hundreds more students opt for face-to-face instruction in second grading period for Tomball, Magnolia ISDs

More students have opted to enroll in face-to-face learning in the second grading period of the 2020-21 school year in Tomball and Magnolia ISDs.

Early voting runs through Oct. 30. Election Day is Nov. 3. (Adriana Rezal/Community Impact Newspaper)
Double-edged sword: As voter turnout reaches all-time highs in Greater Houston area, so does risk of incomplete ballots

Under-votes, or votes that are never cast in a particular race, occur when voters cast incomplete ballots. They typically surge in elections with high voter turnout, said Steve Leakey, president of the Montgomery County Voter Awareness Council.

Harris County residents have returned approximately 163,000 mail-in ballots. (Hunter Marrow/Community Impact Newspaper)
Nearly 163,000 Harris County voters have submitted mail-in ballots

Early voting and mail-in ballots will be counted after polls close on Election Day.

Rose Rooftop opened Sept. 1. (Courtesy Howard Hughes Corp.)
Rose Rooftop now serving upscale dining, spirits in Waterway Square

The venue features a lounge, restaurant and rooftop bar, along with a variety of events.

ExxonMobil's Houston campus opened in Springwoods Village in 2014. (Courtesy ExxonMobil)
ExxonMobil to lay off 1,900 employees primarily in Greater Houston area

Citing economic strain due to the ongoing coronavirus pandemic, ExxonMobil officials announced in a press release Oct. 29 plans to lay off approximately 1,900 employees primarily at its management offices in Houston.

The Woodlands Township board of directors met Oct. 28 at Town Hall on Technology Forest Boulevard. (Screenshot via The Woodlands Township)
The Woodlands seeks $1.33M reimbursement in CARES funds from Harris, Montgomery counties

Although most of The Woodlands is within Montgomery County, the CARES Act allocations requested from Harris County in October are more than twice those requested from Montgomery County.

Shenandoah City Council spoke with Woodloft developers during an Oct. 28 meeting. (Hannah Zedaker/Community Impact Newspaper)
Shenandoah multifamily project approved, must begin construction within one year

The Woodlofts multifamily development has seen several changes to project plans, but construction is set to begin soon.

Less than a week ahead of the Nov. 3 Election Day, Cihan Varol, an associate professor with Sam Houston State University's Cyber Forensics Intelligence Center, shared insight on foreign election hacking and what it means for voters. (Courtesy Adobe Stock)
Q&A: Sam Houston State University cyber forensics intelligence expert talks foreign election hacking ahead of Nov. 3

"There is a very slim chance that the hackers can change vote count, but they can definitely influence people to believe that they did manipulate it," Cihan Varol said. "If election fraud is going to happen, it'll be because of disinformation."

Face coverings are not required for those entering polling places in Texas during the general election. (Courtesy Adobe Stock)
UPDATED: U.S. appeals court pauses decision voiding face covering exemption at polling places

The court temporarily stayed a district judge's decision to void an exemption to Gov. Greg Abbott's statewide face covering order concerning polling places.