A Very, Very Merry Christmas From The OIl And Gas Industry To The State Of Texas

A reader sent a link to this very nice article in Forbes:

According to the [Texas state] Comptroller, the state ended its 2012-2013 biennium with a surplus of more than $2.6 billion, almost three times the previously projected amount of $964 million.  The reason why?  Because the Texas oil and natural gas industry’s tax payments were more than $2 billion more than anticipated.

That is truly extraordinary, and just as encouraging is what all this means for the State’s Rainy Day Fund.  Some observers had expressed concerns earlier in the year that the Fund might be somewhat depleted when the 2015 session of the Legislature convenes, after the 2013 Legislature had tapped the fund for several billion dollars in earmarked funds for the State Water Plan and to help counties in heavy oil and gas development areas pay for road repairs.

But because the Rainy Day Fund is financed almost solely by severance taxes on oil and natural gas production, this large uptick in industry tax payments now enables the Comptroller to project that the Fund will have a balance of around $8.1 billion in January 2015, when legislators return to Austin.  Dale Craymer, President of the Texas Taxpayers and Research Association (TTARA), thinks that estimate is actually conservative, and that the fund balance will actually significantly exceed that estimate.  Past results would indicate that Mr. Craymer is likely to be proven correct.

Then there’s the jobs report, as indicated in the quote from Mrs. Combs at the top of this story.  The ability of this state to have more than fully recovered at this point from the deepest recession in 70 years in the face of an otherwise moribund national economy is a testament to the state’s resource base, its people, its business climate and its leadership in Austin.  It is important not to discount how crucial the last part of that equation is.