Unencumbered and Unobligated General Revenue Fund Balance and Severance Tax Transfers to the Economic Stabilization Fund (ESF) and State Highway Fund (SHF)
Economic Stabilization Fund (ESF) Balances
The State Highway Fund (SHF) and Economic Stabilization Fund (ESF) receive oil and gas severance tax revenue. In addition, the ESF receives half of any unencumbered balance at the end of a biennium, and the SHF receives a share of sales tax and motor vehicle sales tax.
The SHF in 2024-25 will receive $6.87 billion in severance tax revenue; $5.65 billion in motor fuel tax revenue; $5 billion in sales tax revenue; and about $1.43 billion in motor vehicle sales tax revenue.
The ESF will receive about $5.7 billion in general revenue, which is half the unencumbered ending balance for fiscal 2023 (absent any legislative appropriations affecting that balance).
If not for a constitutional spending cap on the ESF, it also would receive about $6.87 billion from severance taxes in 2024-25. But because the Texas Constitution caps the ESF balance at $26.38 billion in fiscal 2025, about $0.69 billion instead will remain available for general-purpose spending.
*The transfer of severance taxes in fiscal 2025 will result in the ESF reaching its constitutional limit of $26.38 billion for the 2024-25 biennium.
We project that returns on the invested portion of the ESF will result in a fiscal 2025 ending balance of $27.13 billion.