The Texas oil and natural gas industry paid $26.3 billion in state and local taxes and state royalties in fiscal year (FY) 2023 – the highest total in Texas history – shattering last year’s record by more than $1.5 billion. 

$26.3 billion in state and local tax revenue and royalties from the Texas oil and natural gas industry translates to an extraordinary $72 million every day that pays for Texas’ public schools, universities, roads, first responders and other essential services. Several sources of tax revenue from oil and natural gas surged in FY 23 including state and local sales taxes paid by the industry, which rose by $1.6 billion, an indicator of the industry’s ongoing investment in Texas. Property taxes paid by the oil and natural gas industry rose another $1.8 billion, as property values of oil and natural gas-bearing mineral properties more than doubled in a single year.

In 2023, 99 percent of the state’s oil and natural gas royalties were deposited into the Permanent School Fund and the Permanent University Fund, which support Texas public education. Each fund received $1.8 billion. Out of FY 2023’s production taxes paid, the Economic Stabilization (“Rainy Day”) Fund, or ESF, and the State Highway Fund (SHF) each received $3.3 billion. Since its inception in 1987, the Rainy Day Fund has received over $31.2 billion from oil and natural gas production taxes. All of these are funded almost exclusively with taxes and state royalties paid by the oil and natural gas industry.

In FY 2023, Texas school districts received $2.81 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities. Counties received an additional $885.6 million in these property taxes.