As challenging as the past two years have been, the Texas oil and natural gas industry continues to contribute tremendously to state and local tax coffers.
In Fiscal Year 2021, the industry paid $15.8 billion in state and local taxes and state royalties. This revenue from oil and natural gas production, pipelines, refineries and LNG facilities translates into about $43 million each day that pay for our schools, universities, roads, first responders and essential services.
Since 2007, when TXOGA first started compiling this data, the Texas oil and natural gas industry has paid more than $178.7 billion in state and local taxes and state royalties, a figure that doesn’t include the hundreds of billions of dollars in payroll for some of the highest paying jobs in the state and the economic ripple effect of the industry on other sectors of the economy.
Texas oil and natural gas tax and royalty revenue is used to support education, transportation, healthcare and infrastructure through the State Highway Fund, Economic Stabilization Fund (commonly known as the Rainy Day Fund), Permanent School Fund (PSF) and Permanent University Fund (PUF) – all of which are funded with taxes and state royalties paid by the oil and natural gas industry.
“There is no substitute for oil and natural gas and a strong, robust industry benefits every Texan".
Fueling High-Paying Jobs
Texas oil and natural gas industry jobs continue to be good for Texas as well as for the families and communities these jobs support. In FY 2021, the industry employed 422,122 Texans, and every direct job in the Texas oil and natural gas industry creates an additional 2.2 jobs elsewhere in the Texas economy. In total, direct oil and natural gas employment plus the industry’s spending on expenses such as capital goods, electricity, construction, services and supplies generates a total of 1.37 million Texas jobs.
Wages and salaries paid by the Texas oil and natural gas industry also stand out significantly when compared to the rest of the private sector. Texas oil and natural gas employers paid an average of $108,988 per job in 2021. Other private sectors averaged $63,027.
Fueling Public Education
Oil and natural gas royalties to state funds, particularly the Permanent University Fund and Permanent School Fund, widely support Texas public education. In fact, 99% of the state’s oil and natural gas royalties were deposited into these funds with the PUF receiving $979 million and the PSF receiving over $1.1 billion.
Texas independent school districts directly received $1.84 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Independent school districts in the Permian Basin directly received $887.7 million in oil and natural gas property taxes in 2021, while ISDs across the Eagle Ford Shale received $453.3 million.
Fueling Texas Communities
In fiscal year 2021, Texas counties received $640 million in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Counties in the Permian Basin received $319.5 million in oil and natural gas property taxes, while counties in the Eagle Ford Shale received $158.5 million.
Since the Economic Stabilization (“Rainy Day”) Fund, or ESF, was established in 1987, it has been appropriated 128 times, the first of which was to fund public education. The Texas oil and natural gas industry is the funding source for the ESF and the sum of all ESF appropriations since its inception totals $18.2 billion. Without the direct funding from taxes paid by the Texas oil and natural gas industry, the following priority items would not have received the substantial dollars allocated to meet essential needs.
"Our state, nation and environment are benefitting tremendously because of oil and natural gas development here in Texas".