The economic damage in Texas from the coronavirus pandemic has left a nearly $1 billion deficit in the state budget as the nation's energy capital remains hampered by a slow recovery and a half-million fewer jobs than a year ago.
The forecast Monday by state officials is far brighter than bleaker projections last summer when Republican Comptroller Glenn Hegar estimated that the shortfall could be four times as worse. Still, the deficit could result in cuts to state services as the GOP-controlled Legislature returns to work Tuesday.
Lawmakers are coming back to the Capitol at a moment when the spread of the virus has never been worse in Texas. More than 13,000 patients with COVID-19 are hospitalized and the seven-day rolling average for daily new cases in Texas is more than 23,000.
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Republican Gov. Greg Abbott has kept some business restrictions in place but has ruled out more lockdowns.
Hegar said the hospitality sector has been hardest-hit during the pandemic. He said a rebound in oil prices and production substantially improved the economic outlook in Texas from just a few months ago.
Many economists say that once coronavirus vaccines are more widely distributed, a broader recovery should take hold in the second half of the year.
Texas Lt. Gov. Dan Patrick (R) released the following statement Monday in response to Hegar's assessment.
"The Comptroller's Biennial Revenue Estimate today is welcome news considering the economic challenges our state has faced. We believe that with a continuing healthy economy, a growing Economic Stabilization Fund and federal COVID-19 relief, we will be able to move forward on our budget priorities this session and balance the budget by session's end, as required by the Constitution. We will:
- Continue to mitigate the impact of the pandemic while positioning the Texas economy to come back stronger than ever.
- Maintain the historic funding increases in education from last session as well as teacher pay increases.
- Maintain the $9 billion shift in franchise tax, homestead exemptions and school property taxes enacted since 2015.
- Maintain our commitment to meet the growing cost of health care.
- Maintain our commitment to border security, transportation and infrastructure.
"We have ensured that Texas remains well-positioned to continue to grow and strengthen our economy, overcome the hurdles that we still face and continue to make our state a place where Texans can thrive and prosper."
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