Where Does Texas’ Tax Revenue Go? 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 percent of motor fuel tax net collections, most motor vehicle registration fees and, since fiscal 2015, one-half of 75 percent of oil production and natural gas production tax revenues exceeding fiscal 1987 collections in any fiscal year. Beginning in fiscal 2018, based on a constitutional amendment approved by Texas voters in 2015, the first $2.5 billion of state sales tax collections in excess of $28 billion a fiscal year are transferred to the SHF. Beginning in fiscal 2020, 35 percent of motor vehicle sales and rental tax collections in excess of $5 billion are transferred into the SHF, a threshold that was first met in fiscal 2021. In the 2022-23 biennium, the Comptroller’s office estimates the SHF will receive $28.4 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. A $1 billion transfer to the PTRF from GR was made at the end of fiscal 2021, and over the 2022-23 biennium, the Comptroller’s office estimates the PTRF will receive $4.4 billion from all revenue sources for a total of $5.4 billion. The ESF, also known as the Rainy Day Fund, receives one-half of 75 percent 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 $12.6 billion. This balance would represent 62.3 percent of the cap, as set by the Constitution. State Highway Fund (SHF) FISCAL 2020 FISCAL 2021 FISCAL 2022 FISCAL 2023 ACTUAL ACTUAL ESTIMATED ESTIMATED Total State Revenue $8,798,742,701 $8,835,169,725 $8,912,099,000 $10,007,311,000 Total Federal Income $5,182,182,072 $5,358,072,653 $5,413,924,000 $4,054,849,000 Total Revenue $13,980,924,773 $14,193,242,378 $14,326,023,000 $14,062,160,000 Property Tax Relief Fund (PTRF) FISCAL 2020 FISCAL 2021 FISCAL 2022 FISCAL 2023 ACTUAL ACTUAL ESTIMATED ESTIMATED Total State Revenue $2,140,483,244 $2,196,639,520 $2,140,787,000 $2,282,930,000 Transfers - $1,000,000,000 - - Total Revenue and Other Sources $2,140,483,244 $3,196,639,520 $2,140,787,000 $2,282,930,000 Economic Stabilization Fund (ESF) FISCAL 2020 FISCAL 2021 FISCAL 2022 FISCAL 2023 ACTUAL ACTUAL ESTIMATED ESTIMATED Ending Cash Balance $5,895,953,909 $5,000,594,507 $2,549,840,965 $3,243,327,794 Ending Invested Balance $4,100,561,030 $5,273,897,763 $7,507,327,216 $9,372,163,601 Total Ending Balance $9,996,514,939 $10,274,492,270 $10,057,168,181 $12,615,491,396 ESF Cap $18,797,980,185 $18,797,980,185 $20,260,891,219 $20,260,891,219 The Comptrolle and account for from several of be found at com A N F I S SOURCE Tax Collections Federal Income Licenses, Fees, State Health Se and Rebates Net Lottery Pro Land Income Interest and Inv Settlements of Escheated Esta Sales of Goods Other Revenue Total Net Reve 26
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