$1.5 billion in revenues from Texas oil & gas production taxes split between rainy day and highway funds

Texas Comptroller Glenn Hegar has announced the transfer of $1.47 billion into the State Highway Fund and the Economic Stabilization Fund (ESF), commonly known as the “Rainy Day Fund.” The two funds received approximately $734 million each.

Higher oil and gas production tax revenues triggered the cash dispersal, per state law

The transfer amounts are based on oil production and natural gas production tax revenues in excess of 1987 collections. If either tax is greater than the 1987 threshold, an amount equal to 75 percent of the excess is transferred, the Comptroller’s office said in a statement.

Texas’s Elevated 2017 Oil & Gas Production Tax Revenue Sends $1.5 Billion to Highways, Rainy Day Fund

Permian basin cranking out oil, production taxes for Texas.

In November 2014, a constitutional amendment was passed allocating at least half of these severance taxes to the ESF and the remainder to the State Highway Fund for use on non-toll highway construction, maintenance and right-of-way acquisition.

According to the Texas Constitution, the transfer to the ESF must occur within 90 days following the end of the fiscal year. At the end of the state’s fiscal year — Aug. 31, 2017 — the balance in the ESF was $10.29 billion. The new balance after the most recent transfer, and accounting for current expenditures from fiscal 2018 ESF appropriations, is $10.98 billion.

“The Rainy Day Fund … allows us to maintain solid fiscal footing even during unforeseen circumstances, such as those our state encountered during Harvey,” Hegar said. “Similarly, the transfer into the State Highway Fund will continue to allow the state to address growing transportation needs to keep our economic engine running smoothly.”

The Texas general fund data provides taxes that produced revenues for the general fund:

  • Texas’s natural gas production taxes for the FY ended August 31, 2017, were $983 million, up 70% from the prior fiscal year.
  • Texas’s oil production taxes for the FY ended August 31, 2017 were $2.4 billion, up 24% from the prior fiscal year.



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