Little criticism of Hegar for steep revenue cut
AUSTIN — When State Comptroller Glenn Hegar cut his revenue estimate by billions of dollars, he got little criticism for being too optimistic with his first projection and a lot of credit for the way he handled the new forecast.
It helped that lawmakers didn’t spend all the money that Hegar said would be available when he set state budget-writing parameters with his January revenue estimate.
It helped that some funding ended up higher than projected, further fattening the cushion of unspent money.
Importantly, it helped that Hegar was upfront with the new estimate and proactive in framing it.
“A part of what the comptroller is doing is reinforcing that the comptroller is the keeper of the numbers. I think it’s a real positive that people don’t have to guess at what the comptroller is thinking because the comptroller will now tell you what he is thinking,” said Dale Craymer, a budget expert with experience in key state government positions who’s president of the business-based Texas Taxpayers and Research Association. “Hegar is being more open than what we’ve seen in past years.”
Hegar is required to update the revenue numbers when he certifies the two-year budget passed by lawmakers.
He’s not required to put out a news release about it or give a series of interviews explaining the new numbers, but he did that, too, last week.
Due to slump in oil, gas
It was a smart move. It not only gave reporters a chance to ask questions, it gave Hegar a chance to explain why the estimate changed and to emphasize that he is re-casting numbers as the economy warrants it.
Hegar’s new forecast had fewer immediate policy implications than some adjustments by past comptrollers, and that also dampened the potential for criticism.
When he gave his initial revenue estimate as a brand-new comptroller in January, Hegar predicted that tax collections for the two-year budget period that began Sept. 1 would be $4.6 billion higher than he now thinks they’ll be. The multibillion-dollar dip in his new forecast is due mainly to the slumping oil and gas industry.
More than enough to cover
But there’s still more than enough to cover general-revenue spending thanks to factors including the money left on the table by lawmakers when they wrote the budget, which totals $209.4 billion when taking into account federal and state funds.
There is an effect on expected transportation funding in the fiscal year that begins next Sept. 1, as we’ve reported.
That’s because a portion of transportation funding comes from dedicated oil-and-gas revenue, and those dollars are expected to drop by about $685 million compared to Hegar’s initial estimate.
‘Critics can throw darts’
If lawmakers crafting the budget this year had known about how short oil-and-gasrelated funding would be, they would have had the option of replacing that money with general revenue. They’ll get another chance to do so in the 2017 regular session.
Hegar said he informed state leaders about the potential effect of lower oil prices, and that he’ll do the same going forward, letting people know if another update is warranted.
In the meantime, his openness seems to have stemmed off an onslaught of criticism — even from Democrats. I expected them to seize on the downsized forecast from the Republican comptroller, especially since his Demoratic opponent, Mike Collier, campaigned on his credentials as an accountant.
But Democrats didn’t pounce, consumed with topics like Democratic presidential candidate Hillary Clinton’s visit to Texas.
Hegar shrugged it off when I asked him whether Democrats might again make the case for a CPA to fill the comptroller’s office in light of his multibillion-dollar adjustment in the revenue forecast.
“Let people say what they want to say. I’m open. I’m transparent. I’m sitting down and having meetings with people and letting leadership know as well as legislators know,” Hegar said. “I’m as open and transparent on revenue numbers as any administration has ever been and we’ll continue to be that way. Critics they can throw darts if they want. Doesn’t hurt my feelings.”