Texas Sales Tax Revenue Hits Record $2.66B in November

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DALLAS — Despite tumbling oil prices, Texas posted record sales tax revenues in November, according to state Comptroller Susan Combs.

The $2.66 billion collected through Nov. 30 represents a 10.7% increase over the same month in 2013, Combs said. It was the second record for 2014, with the previous high of $2.57 billion recorded in August.

"The growth in sales tax collections was fueled by increased remittances from both business and consumer driven sectors," Combs said in her written report. "The gains were led by oil and natural gas-related sectors, while collections from retail trade and restaurants also rose strongly."

Through November, sales tax revenues for the calendar year total $25.7 billion, about 7.5% higher than the $23.9 billion for the same period last year.

In her final month in office, Combs will send cities, counties, transit systems and special purpose taxing districts their December local sales tax allocations totaling $645.9 million, up 11.4% compared to December 2013.

Combs has served eight years as Comptroller, overseeing the state's financial recovery from the recession to the current boom. Her successor, State Sen. Glenn Hegar, R-Katy, takes office in January.

While production of oil in Texas has more than doubled since 2007 to 745 million barrels in calendar year 2013, a 40% decline in the price of West Texas Intermediate crude since its June 20 peak of $107.26 per barrel has prompted an array of layoff notices and canceled deals among operators.

With WTI crude trading near $61 per barrel on Dec. 10, this year's drop has been the steepest since the crash of 2008 that took the price from an all-time high of $145.29 a barrel in July to below $40 by December.

For some Texas producers operating horizontal fracturing operations in tight shale formations, production was no longer profitable at $80 per barrel. However, some operators in the Eagle Ford shale of South Texas can break even at $53 per barrel, according to researchers at the University of Texas.

Nationwide, oil prices have caused a nearly 40% drop in new well permits issued across the United States in November, according to Reuters.

Despite the permit slowdown, oil production from the United States' biggest shale plays will keep expanding at a rapid pace into early next year, according to the U.S. Energy Information Administration.

Production from the three main plays — the Bakken in North Dakota, and the Eagle Ford and Permian Basin in Texas — is set to rise by about 103,000 barrels per day in January, down just slightly from December's 105,000 bpd rise, the USEIA said.

Eagle Ford oil production will rise by some 30,000 bpd to 1.69 million bpd, according to the EIA's drilling productivity report.

Oil production from the Permian Basin of West Texas and New Mexico will see output grow 46,000 bpd to 1.87 million bpd, the EIA said.

Natural gas production in the major shale plays meanwhile is expected to grow 0.6 billion cubic feet per day (bcfd) month-over-month to 44.7 bcfd in January.

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