'\‘-‘' (07 : • • B B 0-3 _ 111-0C Comptroller of Public Accounts r - Austin,Texas 78774 532- 1145- 9,1300 LB J State Mee Building December 10, 1986 Personal & Confidential The Honorable William P. Clements, Jr. Governor-Elect 1901 North Akard Dallas, Texas 75201 Dear Governor: During our meeting last week, you asked if the Biennial Revenue Estimate for 1988-89 might show some slight revenue growth or be about the same as the 1986-87 estimate of available revenues. Governor, I have met with my revenue estimating department to check and double-check their forecasts. As you know, I have every intention of cooperating with you and your staff in tackling the budget problems we have before us. But, much as I would like to help you at this time, our estimate of $35.1 billion in total revenue for 1988-89 will be, at best, slightly below 1986-87. I believe the decrease--eight-tenths of one percent--is tiny enough for you to safely and truthfully say revenues are essentially flat. I would say they're flat. As you are aware, our forecast is based on assumptions of flat oil prices, declining production and that the U.S. economy will not fall into a recession over the next three years. Anybody knows that economic forecasts are guesses at best, but our guessing record over the past years has been a good one. The downside risk in the 1988-89 estimate is considerable, but it's my best shot and I've got to live with it. As the Legislature makes spending cuts and/or changes in our tax base, I'll stand ready to make sure their actions are fully reflected in future estimates, but the one I provide them at the beginning of the session is the best I can do based on present law and economic conditions. Sincere OCK Comptroller of Public Accounts BB:jm