$32.7 billion. Thanks to taxpayers, that’s the whopping budget surplus Texas will have toward the end of 2023. Your Texas lawmakers are required — per the state’s constitution — to pass a balanced budget. They can spend any amount of the surplus before the 2022-23 biennium ends Aug. 31, or they can add all or part of it into the 2024-25 budget. Or they can do nothing with it at all. Exactly how they decide to use this enormous windfall is now the central conversation before the Texas Legislature. Need help wrapping your head around such a large number? Let’s break it down in simple terms.
Just how large is the $32.7 billion budget surplus?
The number won’t be finalized until after the receipts are all in later this year and legislators determine how much of it they want to spend in the current budget cycle before the end of August. The cash surplus grew over the past 18 months because of historic growth in tax collections by the state. As COVID-19 pandemic restrictions ended, Texas’ tax coffers saw soaring economic growth that boosted the state’s revenue when consumers picked up on their spending. Spikes in energy prices and the highest rate of general price inflation in 40 years also caused state tax collections to surpass what was expected when lawmakers approved the last budget. Because the Texas Legislature meets every two years, its budget covers two years of state spending, not one. So when the 2022-23 budget was passed two years ago, the projected state revenue for that twoyear time frame was about $119 billion. The total estimated general revenue-related funds for the 2022-23 biennium is now $149 billion. Think about it this way: If the state of Texas were a household making $40,000 a year, it would earn $80,000 over two years. Now imagine that during that time, the household gets some unexpected cash, perhaps a generous bonus. So over that same two years, the household actually brought in about $97,500 instead — about 22% more than expected. That’s an average of $731 in extra money every month that they could spend during the next two years. These funds could be used to build a savings account, make bigger rent or mortgage payments, purchase a car or pay for child care. Texas’ surplus is bigger than the entire budget of many other states. Texas’ $32.7 billion surplus is about the size of the budget of South Carolina. It’s larger than the budgets of 24 states. Texas’ overall budget is the third biggest after California and New York, and followed by Illinois, Pennsylvania, and Florida, according to a 2022 survey conducted by the National Association of State Budget Officers.
