Although there are many considerations in the corporate location decision process, the initiatives undertaken by economic development professionals (and funded by economic development sales tax receipts) have been the major contributing factors in many cases, and the Texas economy has benefited tremendously.
In the midst of a shutdown, state sales tax numbers for March saw a significant drop. Dr. Perryman describes what this means and what can be expected from the coming months.
The comptroller's office has upped the revenue forecast by $500 million, giving lawmakers more money to spend this session.
Lawmakers don't have to take up school funding after the Robin Hood formula was declared constitutional, but Dr. Perryman says essentially local property taxes have become a substitute for state revenue.
As the fiscal year in Texas drew to a close on August 31st, it became apparent that the amount of revenue taken in was almost a billion dollars short of the revised projections.
States have begun to announce major projected budget shortfalls. Some estimates put the national total at $500 billion. The COVID-19 pandemic has not only decreased revenues, but also increased the need for state spending. The result is large gaps and looming calamity. Many states are asking the federal government to include relief in future stimulus packages. Some leaders in Washington have even suggested that states file for bankruptcy, but that has many adverse and disruptive consequences and is likely unconstitutional.
While the diversified state economy continues to grow, one area that will continue to feel the pains of lower oil prices will be the State Treasury. Texas greatly benefited from the oil boom through revenue from natural gas and oil production taxes, which equal 7.5% of the market value of natural gas and 4.6% of the value of oil production in the state. Sales taxes, motor fuels taxes, and many other sources of funds tend to rise with the price and production of oil.