Pub 61 2020-2021 Issue 3

21 SPRING 2021 4 G L E N N H E G A R • T E X A S COMP TROL L ER OF PUBL I C ACCOUNT S Where Does Texas’ Tax Revenue Go? are transferred into the SHF. In the 2022-23 biennium, the Comptroller’s office estimates the SHF will receive $25.2 billion from all sources. The PTRF is used along with GR and other funds to finance the state’s K-12 public education system. The major revenue sources for this fund include the amount of franchise tax collections generated by its restructuring in fiscal 2008, and revenue generated from the $1.00 increase in the cigarette tax rate implemented in fiscal 2007. Over the 2022-23 biennium, the Comptroller’s office estimates the PTRF will receive $4.2 billion from all sources. The ESF, also known as the Rainy Day Fund, receives one-half of 75 % of oil production and natural gas production tax revenues in any fiscal year that exceeds fiscal 1987 collections, and one-half of any unencumbered GR surplus remaining at the end of each biennium. By the end of fiscal 2023, the total ending balance of the ESF is projected to reach $11.6 billion, assuming no withdrawals are made during the 2022-23 biennium. This balance would represent 58.8 % of the cap, as set by the Texas Constitution. For accounting and budgeting purposes, state revenue is deposited or transferred into various funds, with most going into the General Revenue Fund (GR) for appropriation by the Legislature. Some tax revenue, however, is deposited directly or transferred into special funds for specific purposes. Three of the state’s most prominent special revenue funds are the State Highway Fund (SHF), the Property Tax Relief Fund (PTRF) and the Economic Stabilization Fund (ESF). The SHF is used for the construction, maintenance and policing of public roads. Historically, the primary revenues for this fund have been federal receipts, 75 % of motor fuel tax net collections, most motor vehicle registration fees and, since fiscal 2015, one-half of 75 % of oil production and natural gas production tax revenues exceeding fiscal 1987 collections in any fiscal year. A constitutional amendment approved by Texas voters in 2015 allocated the first $2.5 billion of state sales tax collections in excess of $28 billion in a fiscal year to the SHF. Starting in fiscal 2020, 35 % of motor vehicle sales and rental taxes collections in excess of $5 billion State Highway Fund (SHF) FISCAL 2020 FISCAL 2021 FISCAL 2022 FISCAL 2023 ACTUAL ESTIMATED ESTIMATED ESTIMATED Total State Revenue $8,798,742,701 $8,296,224,000 $8,209,828,000 $8,670,804,000 Total Federal Income $5,182, 182,072 $5,853,758,000 $4,329,196,000 $3,963,289,000 Total Revenue $13,980,924,773 $14,149,982,000 $12,539,024,000 $12,634,093,000 Property Tax Relief Fund (PTRF) FISCAL 2020 FISCAL 2021 FISCAL 2022 FISCAL 2023 ACTUAL ESTMATED ESTIMATED ESTIMATED Total Revenue $2,140,483,244 $2,084,728,000 $2,028,444,000 $2,180,666,000 Economic Stabilization Fund (ESF) FISCAL 2020 FISCAL 2021 FISCAL 2022 FISCAL 2023 ACTUAL ESTIMATED ESTIMATED ESTIMATED Ending Cash Balance $5,895,953,909 $4,487,131,546 $2,229,764,919 $2,392,573,583 Ending Invested Balance $4,100,561,030 $4,460,062,140 $7,843,874 ,317 $9,162,013,189 Total Ending Balance $9,996,514,939 $8,947,193,686 $10,073,639,236 $11,554,586,772 ESF Cap $18,797,980,185 $18,797,980,185 $19,652,476,717 $19,652,476,717 T h an sev at SOU Tax Fed Lic Sta and Ne Lan Inte Set Esc Sal Oth Tot Continued on page 22 For accounting and budgeting purposes, state revenue is deposited or transferred into various funds, with most going nto the General Revenue Fund (GR) for appro- priation by the Legislature. Some tax revenue, however, is deposited directly or transferred into special funds for specific purposes. Three of the state’s most prominent special revenue funds are the State Highway Fund (SHF), the Property Tax Relief Fund (PTRF) and the Economic Stabilization Fund (ESF). The SHF is used for the const uction maintenance and policing of public roads. Historically, the primary rev- enues for this fund have been federal receipts, 75% of motor fuel tax net collections, most motor vehicle reg- istration fees and, since fiscal 2015, one-half of 75% of oil production and natural gas production tax revenues exce ding fiscal 1987 coll ctions in a y fiscal ye r. A con- stitutional amendment approved by Texas voters in 2015 allocated the first $2.5 billion of state sales tax collections in excess of $28 billion in a fiscal year to the SHF. Start- ing in fiscal 2020, 35% of motor vehicle sales and rental taxes collections i excess of $5 billion are transferred into the SHF. In the 2022-23 biennium, the Comptrol- ler’s office estimates the SHF will receive $25.2 billion from all sources. The PTRF is used along with GR and other funds to fi- nance the state’s K-12 public education system. The major revenue sources fo his fund i clude the amount of fran- chise tax collections generated by its restructuring in fis- cal 2008, and revenue generated from the $1.00 increase in the cigarette tax rate implemented in fiscal 2007. Over t 2022-23 bien ium, the Comptroller’s office estimates the PTRF will receive $4.2 billion from all sources. The ESF, also known as the Rainy Day Fund, receives one-half of 75% of oil production and natural gas roduc- tion tax revenues in any fiscal year that exc e s scal 1987 collections, and one-half of any unencumbered GR surplus remaining at the end of each biennium. By the end of fiscal 2023, the total ending balance of the ESF is projected to reach $11.6 billion, assuming no withdrawals are made during the 2022-23 biennium. This balance would repre- sent 58.8% of the cap, as set by the Texas Constitution. Where Does Texas’ Tax Revenue Go?