Texas Comptroller Glenn Hegar announced Tuesday he has completed the transfer of about $7.3 billion into the State Highway Fund (SHF) and the Economic Stabilization Fund (ESF; commonly known as the “Rainy Day Fund”). Each fund received nearly $3.64 billion, or 50 percent of the total transfer.
“Texas’ strong economic recovery continues but inflation and supply chain issues coupled with ongoing geopolitical unrest point to uncertainty on the horizon,” Hegar said. “Additionally, our economic strength and business friendly environment continue to attract people and businesses to Texas.
“In order to meet the needs of these new Texans and continue to attract business investment, it is critical that we invest in the infrastructure needed to keep our state fiscally healthy. The ESF and SHF are critical assets for the people of Texas, and these transfers represent a tremendous opportunity to continue to invest in Texas’ future and safeguard our state against uncertainty.”
The transfer amounts are based on crude oil and natural gas production tax revenues in excess of 1987 collections. If either tax generates more revenue than the 1987 threshold, an amount equal to 75 percent of the excess is transferred.
In November 2014, voters approved a constitutional amendment allocating at least half of these severance taxes to the ESF, with the remainder going to the SHF for use on non-toll highway construction, maintenance and right-of-way acquisition.
According to the Texas Constitution, the ESF transfer must occur within 90 days after the end of the fiscal year. When fiscal 2022 ended on Aug. 31, the ESF balance was $10.7 billion. With this most recent transfer, the new balance will be about $14.1 billion, not accounting for currently outstanding spending authority of approximately $872.1 million. The balance in the ESF will change as agencies spend down this remaining appropriation authority and investment earnings are realized.