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State surplus grows by $1.5 billion
Much of the money already committed
By Jason Embry
Wednesday, October 10, 2007Texas collected more in taxes last year than expected, Comptroller Susan Combs said Tuesday.
The state ended the 2007 budget year Aug. 31 with an $8.5 billion surplus, which was $1.5 billion more than Combs projected in January.
“State sales and use tax collections, which registered a 10.9 percent increase over fiscal 2006, have proved particularly robust, propelled in large part by vigorous activity in the mining, construction, manufacturing and trade sectors,” Combs said in a letter Tuesday to Gov. Rick Perry and legislative leaders.
The additional surplus amounts to about 1 percent of the state’s $151.9 billion budget for 2008-09.
Some of the extra money will go to so-called contingency appropriations, which are items in the two-year state budget that lawmakers said they would fund if the state collected extra money.
For instance, $242 million will go toward a state employee pay raise of 2 percent per year for the next two years, although Combs had assured lawmakers that the money for the raise would be there.
Another $300 million is headed to the Texas Department of Transportation for road-building.
Transportation Department spokesman Randall Dillard said that final decisions about how the money would be used have not been made, but he said it would “help offset skyrocketing inflation.”
Highway construction costs have increased 62 percent since 2002, Dillard said.
Combs spokesman R.J. DeSilva said agency officials were still crunching numbers Tuesday to see how much of the new money was already committed and how much will be left over.
Whatever is left will be added to the $2.5 billion that lawmakers left unspent this year so they’d have it for the budget they’ll write in 2009.
That extra money could help in a couple of ways. For one, Combs has said that growth in state sales-tax collections is expected to slow in 2008 and 2009 as compared with the robust growth of the past few years.
Also, it could help if the state’s new business tax, which companies will pay for the first time next year, brings in less than expected.
“How the money should be spent will depend on the next session of the Legislature,” House Speaker Tom Craddick said. “However, I am much more comfortable having $1.5 billion more than expected than $1.5 billion less.”