State of Texas Cash Flow - The Revenue Side

In fiscal 2012, the Texas state government’s net revenue, excluding trust funds, totaled $94.7 billion, 0.4 percent more than in fiscal 2011. Tax collections income accounted for 46.6 percent of total net revenues, followed by federal revenue, which accounted for another 34.8 percent.

Largest state tax sources

Texas state government collected $44.1 billion in taxes during fiscal 2012, 13.4 percent more than in fiscal 2011.

At $24.2 billion, the state sales and use tax generated the most revenue of any single tax in fiscal 2012, accounting for 54.9 percent of fiscal 2012 tax collections and 25.6 percent of all net revenue excluding trust funds. Year-over-year sales tax collections increased 12.6 percent.
The state’s franchise tax generated $4.6 billion in fiscal 2012, making it the second-largest source of tax revenue. The franchise tax is Texas’ primary state tax on business, accounting for 10.4 percent of total tax collections in fiscal 2012.

Sales and rental taxes on motor vehicles and manufactured housing were the third-largest source of state tax revenue in fiscal 2011. The $3.6 billion remitted was a 19.5 percent increase over fiscal 2011.

Other state tax revenue

Motor fuels taxes on gasoline, diesel and liquid petroleum gas (LPG) totaled $3.2 billion in 2012, making them the fourth-largest source of state tax revenue at 7.2 percent of total tax collections.

Natural gas production taxes continued their significant gains by generating $1.5 billion in fiscal 2012, 38.3 percent more than in the previous year.

The oil production tax generated $2.1 billion or 4.8 percent of all tax collections in fiscal 2012, a significant 42.8 percent increase over fiscal 2011.

Few major taxes brought in less revenue in 2012 than the previous year; the largest drop was a $131.4 million reduction in cigarette and tobacco tax collections, which declined 8.4 percent to $1.43 billion.

Other state revenue

Licenses, fees, permits, fines and penalties incurred a 3.4 percent decline from fiscal 2011 collections, but contributed $7.6 billion to the state in fiscal 2012. This category includes more than 230 different types of licenses, fees and permits including higher education tuition, motor vehicle registration fees, professional fees and various inspection fees. 

Interest and investment income experienced its first growth in four years, contributing $1.1 billion in fiscal 2012. This category increased by 6.2 percent from fiscal 2011, and accounted for 1.2 percent of total net revenue.

Net lottery proceeds totaled $1.8 billion in fiscal 2012. Land income brought in an additional $1.4 billion.

Federal income

Texas received $32.9 billion in federal funds during fiscal 2012, 14.3 percent less than in fiscal 2011. Federal funds accounted for 34.8 percent of Texas’ total net revenue, making them the state’s second largest revenue source in fiscal 2012.

It should be noted that much federal revenue comes in the form of matching funds. To receive these, the state must spend its own funds first. Moreover, some federal funds are received by the state but passed through to other entities administering federal programs.

Health and Human Services programs received the largest share of federal revenue in fiscal 2012, at $21.5 billion for medical aid and public assistance programs. These programs experienced a 13.1 percent decline in federal funds from fiscal 2011, netting $3.2 billion less than in the previous year.

The Texas educational system received $5.9 billion in federal revenue in fiscal 2012, almost all of it unmatched revenue.

The Texas Department of Transportation (TxDOT) received $2.9 billion in federal money in fiscal 2012, all of it requiring matching funds.

State of Texas Cash Flow Expenditures

Examine the detailed State of Texas Annual Cash Report 2012 and CASH reports from previous fiscal years.

Posted January 22, 2013