DALLAS — Comptroller Susan Combs reported Wednesday that Texas will collect about $2 billion more revenue than anticipated in the fiscal year beginning Sept. 1.

Over the next two years, revenues are expected to run $5 billion higher than previously projected, Combs indicated.

The revenue estimate forms the basis of budgeting in the next legislative session in January. With revenues running higher than expected, lawmakers are not expected to debate tapping the $8 billion rainy-day fund. However, the additional income is not sufficient to reverse the 2011 session’s cuts in public education, officials indicated.

Texas sales tax collections for the current fiscal year are running about $1.5 billion ahead of projections, while the business franchise tax has exceeded estimates by at least $300 million, Combs reported. The state’s cash balance has grown from $1.6 billion at the end of the previous fiscal year to an estimated $5 billion at the end of August, Combs said.

The $5 billion would help lawmakers cover Medicaid costs, an obligation that has fallen from $4.8 billion to an estimated $3.9 billion as fewer people have enrolled in the health care program amid state cost-cutting.

Gov. Rick Perry recently announced his decision to reject an estimated $62 billion the state would have received under the federal Affordable Care Act over five years for the expansion of Medicaid and to opt out of affordable insurance exchanges. Participating in the program could result in bankruptcy for the state, he asserted.

Health care accounts for more than 34%of all Texas government spending on community and institutional mental health from state, federal and other sources, according to a 2011 report from the comptroller’s office.

The Affordable Care Act would have provided federal funds to cover hospitalization for the state’s inmates in 2014, but Perry removed that option for the Legislature. In fiscal 2009, the Texas Department of Criminal Justice provided health care for 150,568 inmates, making it one of the nation’s largest correctional health care systems, according to Combs’ report. The TDCJ’s health care expenditures totaled $548 million, 98% of which were funded by general state revenues.

Perry joined with other Republican governors in the South in rejecting the expanded health insurance program for poor people. Texas has the largest share of uninsured citizens in the nation. The Supreme Court, in upholding the Affordable Care Act, allowed individual governors to accept or reject federal funds for their citizens.

Medicaid and public education outlays in Texas have grown over the last decade from 58.9% of general revenue to 61.5% in 2011, Combs noted. The figure is expected to grow to 74.6% by 2023.

In a speech in Llano, Texas, the comptroller said that local governments in Texas carry a high debt load in comparison to other large states, with an almost $8,000 per-capita debt load in 2009. The increase came as cities, counties and school districts issued debt to finance future expenditures, such as new facilities and infrastructure.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.