Texas Comptroller Glenn Hegar
Texas Comptroller Glenn Hegar Announces Transfer of $7.3 Billion to State Highway and Rainy Day Funds
(AUSTIN) — Texas Comptroller Glenn Hegar announced today he had 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.
“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. These transfers represent a tremendous opportunity to continue to invest in Texas’ future and safeguard our state against uncertainty.”
Crude oil and natural gas production tax revenues above 1987 collections are the bases of the transfer amounts. If either tax generates more revenue than the 1987 threshold, Texas transfers a sum equal to 75 percent of the excess.
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 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 the currently outstanding spending authority of approximately $872.1 million. As a result, the balance in the ESF will change as agencies spend down this remaining appropriation authority and investment earnings Texas realized.