Texas economy takes a hit - FOX34 Lubbock

Texas economy takes a hit

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LUBBOCK, Texas -
With unemployment skyrocketing and oil prices dropping to record lows, it's been a rough month for the Texas economy. 
In a recent meeting, Glenn Hegar, Texas Comptroller of Public Accounts reflected on the roller coaster the past few months have been.
"If you go back to February, Texas' economy was still strong, we were leading the nation in job growth," Hegar said. "Our sales tax receipts were continuing to be strong and slightly outpacing what we had anticipated when we gave our last revenue estimate."
Things obviously took a drastic turn in March. And unfortunately, Texas is doubly impacted with the pandemic and lowered oil prices.
"I think those ripple affects could be spread out," Hegar said. "In the Permian Basin for example, that's not just gonna hit the oil industry but every mom and pop shop in town."
Hegar said it will be a few more months before he can really grasp the damage. He plans to give a revised revenue statement in July.
"Until we get some real good data, I don't want to be putting a back of the envelope revenue number out there," Hegar said. "However we do know that it will be adjusted downward in the terms of billions of dollars."
Hegar said it's important to keep in mind, that the Texas budget averages about 126 billion dollars a year, with federal and state money. 
And the state's economic stabilization fund, also called the rainy day fund, currently has a little more than 10 billion dollars in it. 
"There's some dollars that haven't been appropriated by the legislature that haven't been drawn down by agencies," Hegar said. "Most of those are either to our state supported living centers or dollars that were going in response to Hurricane Harvey for institutions of higher education that were impacted, as well as different state agencies."
Heger expects even more money in the fund after severance tax collections.
"When the legislature comes back into session in January they'll probably have about 8.5 billion dollars in that fund," Hegar said. "This gives us a lot of flexibility from a cash flow perspective in the treasury."
Though Texas is taking a hit, Hegar said the state's ability to keep cash flowing will help immensely over the next few years.
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