Production of crude oil and natural gas has historically fluctuated based on a number of market-driven and geopolitical factors. Because the Texas Legislature collects severance taxes from this volatile production to primarily fund the state’s Economic Stabilization Fund (ESF), broadly considered the state’s “rainy day fund,” the purpose for and use of the ESF must be worthy.
The ballot language sold to Texas is clear that this money is to fill unexpected revenue declines. However, only 27.4%, or $3.2 billion, of the $11.6 billion spent from the ESF since inception has been for general deficit reduction.