Production also increased from about 3 million barrels a day in 2015 to more than 4.2 million barrels a day in April 2018, according to Brian Ragland, chief financial officer for TxDOT…
Texas Department of Transportation (TxDOT) officials reported that revenue from Proposition 1, that directs oil and gas taxes to the agency, is $800 million more than originally projected this year.
The boost is a result of oil prices more than doubling from $33 per barrel for West Texas intermediate crude in 2016 to $74 a barrel last month.
Production also increased from about 3 million barrels a day in 2015 to more than 4.2 million barrels a day in April 2018, according to Brian Ragland, chief financial officer for TxDOT.
TxDOT officials also expect that economic growth in Texas will produce $300 million more in higher-than expected sales tax revenue during the next year, resulting in as much as a $1.1 billion overall increase in highway funding, according to Ragland.
While TxDOT expects to speed up some road projects with the additional funding, revenue for Prop 1 is inherently volatile and could be reduced by trade wars, natural and other disasters as well as increased oil production in other countries.
Added to the $734 million the agency received in November 2017, TxDOT will have received about $2.1 billion as a result of Prop 1 during this two-year budget cycle. The agency had been projected to receive about $1.3 billion in Prop 1 funds.
In addition, a 2015 constitutional amendment, Proposition 7, brings up to $2.5 billion in sales tax revenue to the agency that previously was directed to the general fund.
Ragland predicts TxDOT will receive the full $5 billion in funding during the 2018-19 budget cycle instead of the $4.7 million previously expected.