Editor: Shannon Cottongame
April 12, 2023
Texas Comptroller of Public Accounts Glenn Hegar was in Hillsboro Wednesday, April 5, and spoke to local residents about state budget projections and his duties as chief finance officer for Texas, which is the world’s ninth-largest economy.
With Hill College hosting the second annual Hill County Summit, Hegar said that he began his higher education by taking classes at a community college, and he thanked Hill College for its efforts in the community.
“It’s amazing what community colleges do,” Hegar said, noting that they are the support network for job creation in the state. “It’s really the vehicle for half of our kids being educated in the state of Texas.”
Introducing himself, Hegar told the group that he was first elected as comptroller in 2014 and served in the Texas House and Senate prior to his time in the executive branch.
While the comptroller has many roles and his office has up to 3,000 employees when fully staffed, the state’s record budget surplus has been a major focus recently.
In January, Hegar released his Biennial Revenue Estimate (BRE), showing that the state was projected to have a record $188.2 billion in revenue available for general-purpose spending during the 2024-25 biennium, a 26.3 percent increase from the 2022-23 biennium.
Hegar told the crowd that these projections are challenging because the estimate provided is for the fiscal year that begins in September and covers the following two years.
“Can anybody with absolute certainty tell me how much income you’re going to have nine months from now for the next two years?” he asked. “It changes, it’s hard, it’s complex, but that’s our job.”
The comptroller said that managing expectations is also part of his job. He has been emphasizing that the economy has outpaced expectations largely because of federal stimulus funds, spikes in energy prices and inflation.
He pointed to several “once-in-a-lifetime” events happening at once that have contributed to the numbers, including the pandemic, the cost of oil and Winter Storm Uri.
With this in mind, Hegar’s message to the legislature has been “don’t take it and just plug it into the budget.” He is encouraging lawmakers to use the money responsibly with the future in mind.
Still, Hegar said that Texas continues to outpace the national average in economic growth, and he is confident that the trend will continue.
He also discussed a recent responsibility that has been added to his office, which is the effort to expand broadband access throughout the state and manage federal dollars coming into Texas for this purpose.
“It’s astonishing to know that of 30 million people in the state of Texas, there are 7 million who don’t have broadband connectivity at their house,” Hegar said. “It’s not because they can’t afford it or choose not to, it’s because it does not exist.”
Hegar said that both the state and federal broadband maps—which were based largely on internet service providers self-reporting on their speeds—are still flawed, and the state is continuing to work through the data.
The comptroller’s office recently opened applications for grants to providers that will be issued with a portion of the first federal allocation, which came to $340 million. Only one-third of that is being rolled out initially so the state can ensure that any bugs in the system are worked out and a portion is reserved for areas of the state that do not yet qualify under the flawed maps.
Hegar said that the broadband expansion project could take up to 10 years, but broadband impacts education and the workforce throughout the state. “It is the transportation system of this century, and you can’t do without it these days,” he said.
Asked about how his office compares to Hillsboro native Bob Bullock’s four terms as comptroller, Hegar said that Bullock worked to invest in technology and update the office. “One of the things Bullock did, he took this office that no one had really heard about and turned it into a pretty influential place,” he said. “People around the agency knew he wanted to improve the agency, and I think we share that.”
Responding to a question about the sales tax forecast for the remainder of the year, Hegar said that the state was recently seeing double-digit increases month after month before dropping to 6.5 percent in last month’s report. As more factors lower the heat of the economy, he said that he expects it to be in that range for the next couple of months.
He also commented on the “rainy day fund,” which is the state’s savings account formally called the Economic Stabilization Fund (ESF). Hegar said that when he took office eight years ago, there was $6.4 billion in the fund. Today it is at $13 billion, and it is forecast to hit at least $26 billion in two years. This means that the fund could reach the upper limit of its constitutionally mandated balance for the first time in its nearly 35-year history.
Hegar said that if he had been asked a couple of years ago if the state would have hit this cap, he would have said, “Don’t worry about it.”
He said that the recent revenue increases have been historical and unprecedented. “We have never experienced anything like this in the past, and I don’t think we’ll witness anything like this in the future,” he said.