Texas booming but lawmakers warned of economic ‘uncertainty’
Texas’ top financial official said Monday that unsettled trade policy by the Trump administration and economic “uncertainty” is clouding the spending picture as returning lawmakers face costly expenses including a public school funding overhaul and Hurricane Harvey’s aftermath.
Those warnings came even as the Republican-controlled Texas Legislature reconvenes this week armed with more spending power than it has had in years because of the robust economy, according to budget projections released by Texas Comptroller Glenn Hegar.
Lawmakers will essentially have $9 billion more than under the state’s current budget, which was written in 2017 during a highly contentious session that was overshadowed by a failed “bathroom bill” targeting transgender people and one measure empowering local police in Texas to ask people about their immigration status.
But Hegar said recent economic conditions still warrants caution.
“I think uncertainty is heightened right now,” Hegar said. He pointed to rising interest rates, trade talks and signs of a slowing global economy.
Hegar, an elected Republican, said the federal government shutdown was having no immediate impact on his estimates but that his office was watching the impasse closely. He also said he did not believe President Donald Trump’s proposed border wall, if built, would have a negative economic impact on Texas.
“With that being said, also, international trade is more important to Texas than any other state,” he said.
On Monday, the White House announced that Trump would visit the border this week.
Republican Gov. Greg Abbott has promised to cut property taxes this year as he begins a second term, but those taxes are also vital to Texas’ classroom spending. In 2016, the Texas Supreme Court ruled that how the state pays for public schools was deeply flawed but still constitutional.
Leaders of both parties have said that overhauling the school finance system is a priority this session.
“The first thing you need to do is fund what we’re doing now, and not start looking for cutting taxes with the money that’s coming in,” said Dick Lavine, a fiscal analyst for the left-leaning Center for Public Policy Priorities.
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