With the news that Texas is expecting one of the biggest budget surpluses in its history, state leaders are calling for the use of the surplus to give financial breaks to taxpayers, such as a reduction in property taxes.
The Center Square said that Texas is anticipated to have a budget surplus of nearly $27 billion, according to Comptroller Glenn Hegar. The surplus would be at record levels if it matches projections. Hegar said that it would elevate the state’s “Rainy Day Fund” by $14.95 billion. In a tweet, Texas Gov. Greg Abbott endorsed the idea of using the surplus budget funds to provide financial relief on property taxes for Texans.
“We need to return as much of that as possible to taxpayers by cutting property taxes,” Abbott said in a July 19 post to his official Twitter account.
The massive upcoming surplus is said to be powered primarily by the substantial taxes paid by the state’s oil and gas industry. Tax revenues from oil grew by 91% according to a report from The Center Square, with tax revenues and royalties from the oil and gas industry totaling $43 million a day in fiscal year 2021.
Texas leads the United States in oil production and, if it was a country, would stand out as the fourth largest producer of oil. The Texas Railroad Commission has issued many new drilling permits and new leases, contributing to this status, The Center Square reported.
Lt. Gov. Dan Patrick concurred with Abbott and made similar calls for property tax breaks. In 2021, the Tax Foundation showed in a report that Texas had the sixth highest property tax rate measured as property taxes paid as a percentage of owner-occupied housing value in 2019.
In a letter to state leadership, Hegar detailed the state’s financial benefits, according to a report from The Center Square. A surplus has been projected for Texas since last November.
