Oil bust blamed as Texas budget outlook shrinks nearly $1 billion

Texas officials say sagging oil prices has shrunk the budget outlook by nearly $1 billion at a time when state agencies are already facing possible cuts next year.

Republican Comptroller Glenn Hegar said Wednesday that “prolonged weakness” in the oil and gas sector caused tax collections for fiscal year 2016 to finish even below his previously lowered expectations.

Hegar says Texas still has plenty of money to cover the current two-year budget after lawmakers left billions of dollars unspent in 2015. But the impact will be felt starting in January when the Legislature reconvenes.

Republican Gov. Greg Abbott told state agencies this summer to look for reductions in anticipation of tighter spending next session. Exceptions were made for border security, mental health and the state’s troubled foster care system.