AUSTIN — Texas Comptroller Glenn Hegar announced today he recently completed the transfer of $2.27 billion into the State Highway Fund (SHF) and the Economic Stabilization Fund (ESF; commonly known as the “Rainy Day Fund”). Each fund received more than $1.13 billion, or 50 percent of the total transfer.
The economic contraction associated with the COVID-19 pandemic and recent volatility in oil prices contributed to the transfer amounts being lower than the $1.66 billion each fund received in fiscal 2020.
“The Rainy Day Fund and the State Highway Fund are critical pieces to ensure Texas’ continued economic strength,” Hegar said. “The State Highway Fund is a key funding source for the transportation infrastructure that is fundamental to our economy, and the importance of maintaining a healthy Rainy Day Fund to help weather unforeseen economic downturns has never been more clear than it has been in recent months.”
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 2020 ended on Aug. 31, the ESF balance was $10 billion.
With this most recent transfer, the new balance will be about $10.7 billion, not accounting for currently outstanding spending authority of approximately $1.86 billion. The balance in the ESF will change as agencies spend down this remaining appropriation authority and investment earnings are realized.