Texas’ budget forecast plummeted to a projected $4.6 billion shortfall as the coronavirus pandemic and low oil prices take a heavy toll on one of America’s largest economies, the state’s Republican comptroller said Monday.
The new assessment is a sharp reversal from October’s forecast that had Texas in line for an estimated $3 billion surplus. State officials cautioned the bleak new budget projections were fraught with uncertainty given that the virus continues to spread in Texas, which for a month has been one of the hardest-hit parts of the U.S.
“It’s important to note that this revised estimate carries unprecedented uncertainty. We’re assuming the state will effectively manage the outbreak and that infection rates won’t overwhelm our health care system,” Comptroller Glenn Hegar said.
The pandemic has wrecked state budgets across the country and forced governments to consider deep cuts. Republican Gov. Greg Abbott in May ordered many state agencies to begin looking to cut spending by 5% before the Legislature meets again in January. The state has so far not made any major budget cuts or layoffs.
Any deficit will test lawmakers’ will to use Texas’ emergency savings fund that has an estimated $9 billion in reserves.