DALLAS – As Texas lawmakers prepare for a special session next week, they will be buoyed by a surge in state revenues that points to a steadily improving economy.
State sales tax revenue, the largest income stream for the state and a key indicator of economic health, soared 10.3% to $2.4 billion, a record for the month of June, according to state Comptroller Glenn Hegar.
At the same time, sales tax revenue collected for local governments and agencies jumped 9% in June to $679.9 million.
Despite the fact that oil prices have remained flat this year, oil and natural gas production taxes in the state rose nearly 32% to $269.9 million, Hegar reported.
“Growth in sales tax revenue was due to increased collections from most sectors of the economy — though the gains still did not offset May’s weaker-than-expected franchise tax collections,” Hegar said. “Receipts from the wholesale trade, information and oil- and gas-related sectors in particular saw significant gains.”
Mirroring the state sales tax revenues were local tax revenues for Midland and Odessa in the heart of Texas’s Permian Basin oil-producing region. Midland’s revenues shot up nearly 28%, while its sister city of Odessa saw revenues soar almost 44%.
While the price of oil has drifted around $45 per barrel for most of the year, the number of drilling rigs seeking oil and gas has increased in recent months.
“The sustained broad-based positive momentum in the Texas economy has been supported by a rebound in oil drilling activity and by generally good conditions for the state’s non-energy businesses,” according to Dallas-based Comerica’s June 29 report.
“Increasing demand from the improving U.S. and global economies will keep the Texas economy expanding, even if we have less of a push from energy going forward,” said Comerica chief economist Robert Dye.
Responding to Gov. Greg Abbott’s call for a special session beginning July 20, lawmakers have already filed 58 bills. Although the session was originally called to authorize key boards such as the Texas Medical Board to continue operating under the state’s “sunset law,” Abbott opened up the session to a wide array of regulatory and economic matters in a subsequent call, including school finance reform, raises for teachers, reform of property taxes and other issues.
Most of the drama in the upcoming session will focus on bathroom privileges for trans-gender students in public schools, a measure that Lt. Gov. Dan Patrick failed to get passed in the regular session that ended May 31.
Abbott touted the Texas economy at the opening of the Toyota North American headquarters in Plano on July 6.
In 2014, Toyota Motor North America announced it would move its headquarters from Torrance, Calif., to Plano, consolidating its widely spread workforce from three other states to a new $350 million, 2 million-square-foot campus.
“With the second-largest workforce in the nation at more than 13 million strong, Texas continues to be a national leader in job creation,” Abbott said. “In fact, more Texans have jobs today than ever before, even as more people are moving here every year from states that overtax and overregulate.”