DALLAS — With oil and gas prices on the rise, Texas saw its sales tax revenues for November soar 11.1% to a record $2.78 billion, according to State Comptroller Glenn Hegar.
On a percentage basis, the November increase was the largest since February 2015 when sales tax revenues rose 11.7%
“The sales tax figure was a record,” Hegar spokesman Kevin Lyons confirmed. “Typically, November and August are our biggest months of the year.”
Oil and natural gas production taxes rose a sizeable 39.9% to $354.6 million.
"The double-digit growth in sales tax revenue compared to last year was fueled, in part, by increased collections from oil- and natural gas-related sectors," Hegar said. "Recent higher oil prices have spurred increased well drilling and completion. Collections from retail trade and restaurants were also up, reflecting growth in consumer spending."
The record total for a month is remarkable because it came in the wake of Hurricane Harvey, which landed on the populous southeast Texas coast on Aug. 25. So far, the state has suffered no noticeable economic setbacks because of the storm.
“We’ve still got folks out trying to figure out how it affected the state,” Lyons said. “But as far as sales tax, it’s been pretty negligible.”
Total sales tax revenue for the three months ending in November 2017 was up 9.5% compared to the same period a year ago.
Sales tax revenue is the largest source of state funding for the state budget, accounting for 58% of all tax collections. Motor vehicle sales and rental taxes as well as motor fuel taxes and oil and natural gas production taxes also are large revenue sources for the state.
In November 2017, Texas collected $415.3 million in motor fuel taxes, an increase of 9.2% from the same month in 2016.
Vehicle sales and rental taxes rose 9.2% to $415.3 million, boosted by the need to replace cars damaged by Hurricane Harvey, the report noted.
Motor fuel taxes collected at the pump were up 1.7% to $308.2 million.
Last week Hegar announced the transfer of $1.47 billion into the State Highway Fund and the Economic Stabilization Fund, commonly known as the Rainy Day Fund. Each fund received more than $734 million, or half of the total transfer.
"The Rainy Day Fund is an important tool for our state because it allows us to maintain solid fiscal footing even during unforeseen circumstances, such as those our state encountered during Harvey," Hegar said. "Similarly, the transfer into the State Highway Fund will continue to allow the state to address growing transportation needs to keep our economic engine running smoothly."
The transfer amounts are based on oil production and natural gas production tax revenues in excess of 1987 collections. If either tax is greater than the 1987 threshold, an amount equal to 75% of the excess is transferred.
In November 2014, a constitutional amendment was passed allocating at least half of the severance taxes to the Rainy Day Fund and the remainder to the State Highway Fund for use on non-toll highway construction, maintenance and right-of-way acquisition.
According to the Texas Constitution, the transfer to the ESF must occur within 90 days following the end of the fiscal year.
At the end of the state's fiscal year — Aug. 31, 2017 — the balance in the ESF was $10.29 billion. The new balance after the most recent transfer, accounting for current expenditures from fiscal 2018 ESF appropriations, is $10.98 billion.