Transfers to ESF and SHF

The State Highway Fund (SHF) and Economic Stabilization Fund (ESF) receive oil and natural 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 2026-27 will receive $5.1 billion in severance tax revenue; $5.8 billion in motor fuel tax revenue; $5 billion in sales tax revenue; and about $1.33 billion in motor vehicle sales tax revenue. If not for a constitutional cap on the ESF balance, it would receive about $5.1 billion from severance taxes in 2026-27. But because the Texas Constitution caps the ESF balance, about $0.31 billion will remain available for general purpose spending in fiscal 2026 — and $2.64 billion in fiscal 2027.