Austin — Texas Comptroller Glenn Hegar announced he recently completed the transfer of $3.33 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 $1.66 billion, or 50 percent of the total transfer.
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 2019 ended on Aug. 31, the ESF balance was $10.1 billion.
With this most recent transfer, the new balance will be about $11.45 billion, not accounting for currently outstanding spending authority of approximately $3.74 billion. The balance in the ESF will change as agencies spend down this remaining appropriation authority and investment earnings are realized.
Due to Senate Bill 69, championed by Hegar and signed into law during the last legislative session, the Comptroller’s office will be able to grow the ESF by investing its funds more prudently.
“Senate Bill 69 allows me to move up to 75 percent of the Rainy Day Fund into prudent, but higher-yield, investments that would maintain the state’s purchasing power,” Hegar said. “The Rainy Day Fund is a tremendous asset for the taxpayers of Texas, and I want to protect that asset to ensure it will be there for future generations.”
SOURCE Office of Texas Comptroller