Texplainer: How Will High Gas Prices Affect the Budget?
Hey, Texplainer: What do high gasoline prices mean for the state budget?
Oil prices have risen recently, as unrest in the Middle East continues. Gasoline prices have gone up in tandem. In Texas, a gallon of gas costs a dollar more than a year ago. For state policymakers, a crucial question is how higher prices at the pump will affect Texas' estimated $15 billion to $27 billion budget gap. The answer, of course, is that it's complicated.
To some extent high oil prices are good for Texas tax revenues. "When prices remain above $100 per barrel, the state could ...
Comments (4)
Chris Lippincott via Texas Tribune on Facebook
Good explanation. I think the real impact on state motor fuels tax receipts is not a temporary dip in the number of miles Texas drivers travel but rather the incentive that creates for consumers to buy ever more fuel-efficient vehicles. Yes, part of that is encouraged by increases in the federal CAFE standard, and yes, Texans will still buy big pickups and SUVs. Still, experts predict that in 20 years, we'll have twice as many cars on the road and no discernible increase in motor fuel consumption. That's good for the air but bad for the State Highway Fund and the Permanent School Fund.
Kate Galbraith
The following is from an email sent by State Rep. Donna Howard, D-Austin, who was unable to comment directly for technical reasons:
Just want to remind you of another impact on our budget via the Rainy Day Fund. As The Tribune has already explained in the Tribpedia, “if the state collected $1,000 of oil revenue in 1987 and this year collected $3,000, the first thousand is subtracted and the Rainy Day Fund would get 75 percent of $2,000 (which would be $1,500). The rest of the money simply goes back into general revenue, the pot the Legislature uses to pay for almost everything.”
According to a former state revenue estimator, we could see an additional $400 million more in oil production collections, resulting in a deposit of $300 million more per year to the Rainy Day Fund--$600 million more in the next biennium than the comptroller’s revenue estimate. He went on to predict that we might actually see an increase of $1.2 billion in the budget revenue estimate for the rainy day fund (rather than the $760 million estimated by the comptroller).
As you state in your article, it’s complicated.
Donna Howard
Rudy Gonzales
My question is how many jobs will this generate? My question is how many jobs will this save? My question is how many jobs will this produce? My question is how many jobs will this lose?
Wallis Parnelle
Well here we are again, high gas prices. Actually doesn't bother me much, since I saw the future many many, years ago. Really tired of hearing people who drive gas guzzlers(SUV/BigFTrucks, complaining. Oh well, wonder about these people, how they can continue to make the same driving, vehicle mistakes, over and over gain. For lost driving revenue, taxes have to go up, with credits for business vehicles, that rely, on trucks to haul goods around the state. And that doesn't include real estate agents talking on their cell, in SUVs.