Sales tax revenue didn’t decline as much as in previous months.
In February, the state’s sales tax collections were down 8.8 percent compared with the same month a year earlier. Though still in the red, the February figure looked better than the previous months’ double-digit decreases that have put the state 13 percent behind last year’s collections six months into the budget year.
“One month certainly doesn’t make a trend, but it is encouraging to see that we are beginning to move in the right direction,” said [John Heleman , the Texas comptroller’s chief revenue estimator], who added that he expects to see sales tax growth starting this summer.
Even so, the state’s budget shortfall is expected to be about $11 billion at a minimum and could reach as high as $15 billion, John O’Brien, the executive director of the Legislative Budget Board, told the House Appropriations Committee.
All things considered, an $11 billion hole isn’t as bad as it looks, assuming that the political will really is there to use the Rainy Day Fund. If so, then as outgoing Rep. Carl Isett is saying, 2011 won’t be as bad as 2003 was because the remaining gap is a much smaller percentage of the overall budget. It’s still really bad, though, and I’ll believe we’ll use the Rainy Day Fund when I see it, as any time a supermajority is needed it’s easy for things to not go as planned. Also, while using the Rainy Day Fund is clearly called for here, it doesn’t solve the underlying structural problems. That property tax cut is still costing billions more than the business margins tax is taking in. At least one of those things needs to be fixed or we’ll be right back where we started in 2013.