State Controller Transfers $1.5 Billion In Oil & Gas Tax Revenue-Based Funds Into Highway and Rainy Day Funds: Press Release

November 30, 2017

 

Texas Comptroller Glenn Hegar has announced the recent transfer of $1.47 billion into the State Highway Fund and the Economic Stabilization Fund (ESF), commonly known as the Rainy Day Fund.
Each fund received more than $734 million, or 50 percent of the total transfer.

The Rainy Day Fund is an important tool for our state because it allows us to maintain solid fiscal footing even during unforeseen circumstances, such as those our state encountered during Harvey,” Hegar said.

The governor and Legislature will determine how best to use this important asset, but I think all Texans are glad this tool is in place.

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 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.

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.