|New Texas Comptroller Glenn Hegar|
already looks as wrong as rain on oil prices.
And per the Statesman's take, they appear to come from fantasyland.
Hegar’s approximation – formulated, he has said, under much and diverse advisement – showed that state lawmakers, who convene at noon on Tuesday, will have $113 billion in general revenue to spend on the 2016-17 budget. It assumes oil prices – currently at less than $50 a barrel – will be $64 per barrel on average for current fiscal year, which ends Aug. 31, and to nearly $70 per barrel by the end of 2017.
Goldman Sachs says Glenn Hegar is off by $30 a barrel.
In a wide-ranging note to clients, Goldman Sachs slashed its forecast for oil prices. It now estimates that that crude will average $50.40 a barrel this year, far below its previous forecast of $83.75. It also trimmed its forecast for Brent crude, a type used in international markets, to $70 a barrel from $90.More here. GS has its 12-month-out price on West Texas Intermediate at $65. So, no way in hell, if GS is even halfway right, that oil prices average $64 for the year.
(Update: What if even Sachs was too optimistic in its original estimates? What if oil sits at $40 for months? See my newer post here.)
If the Texas Lege isn't listening to somebody else, we're really, really up shit creek.
By press release, here’s the details. Actual release and more analysis below the fold.
In dollars and cents? That would be $60 billion, not $61.2. So, knock $1.2 billion off his sales tax numbers. And knock $800 million off his oil and gas revenue numbers, for $8.1 billion, not $8.9 billion, combined.
Hegar's estimating $2 billion too high, in my book.
And, that's not even counting "run-on" economic spillover effects.
I can name one of those right now. I just saw a press release from the Texas lignite coal mining association, officially the Texas Mining and Reclamation Association, touting the economic benefits of Texas' cheap (in quality, and maybe price) and dirty coal. I'm sure they're scared of continuing sub-$50 oil prices.
Here's more reasons to think Hegar isn't being conservative enough this time around. It may take several months of low-priced oil to knock all the current structural surpluses out of the system. If just half that doom and gloom is right, West Texas Intermediate may not break $65/bbl before the end of this year. Or, it may take even longer than "several months."
In either case, Hegar simply seems to be imitating national-level Republicans who offer up bullshit for economics on a regular basis, usually, as here, as a prelude to justifying spending cuts and tax breaks for the rich.
That said, Hegar could rein in his numbers by another $2 billion, and I don't think that would slow Dan Patrick down one minute.
And, since, besides oil, the "Rick Perry economic miracle" was otherwise based on illegal immigration, and we know how Danny Boy feels about that, we're in a lot of trouble.
Perry's got more, namely, about how Rick Perry's leaving the barn just before the barn door hits him in the butt.