Texas oil and gas raised roughly $3 billion in tax revenue for the state last year.
Comptroller Glen Hegar says the state charges businesses a 4.6 percent tax on oil production and a 7.5 percent rate on natural gas production.
“For each barrel of oil or cubic feet of natural gas that comes out of ground, 25 percent is dedicated toward public education, and then the revenues that come in go into the general treasury and the legislature can spend them however they want to up to a certain threshold,” says Hegar.
The remaining 75 percent is split between the state's highway and stabilization funds.
“What most people call our Rainy Day Fund, or in other words the state's savings account, and today that account has almost $11 billion in it directly from oil and gas severance taxes,” he says.
Hegar projects another $7 billion from oil and gas in the 2018-19 budget cycle.
“The Texas economy is much more diverse and can withstand the dip, the highs and lows of oil and gas,” says Hegar. “However, it brings in a significant amount of revenue that you're able to build roads or have the Economic Stabilization Fund.”