Oil and natural gas companies paid at least $13.4 billion in taxes and royalties to Texas state coffers before the coronavrius pandemic created a price crash and what is shaping up to become a historic industry downturn.
The industry paid $11.3 billion in taxes and $2.1 billion in royalties to the state in 2019, a 14 percent increase from one year earlier, a new report from the Permian Basin Petroleum Association shows.
An estimated 62 percent of those funds came from the Permian Basin, the report showed.
It remains to be seen how record low oil prices and the coronavirus pandemic will affect the state’s budget.
But the 2019 taxes and royalties were assessed when West Texas Intermediate, the U.S. benchmark for crude oil, was trading around $50 per barrel. Coronavirus-related shutdowns currently have oil at $30 per barrel.
Texas Comptroller Glenn Hegar is expected to release state revenue estimates in July while lawmakers are expected to return to the Texas State Capitol in Austin in January to draft the state budget for fiscal years 2021 and 2022.
With a portion of taxes and royalties from oil and natural gas going to the state’s $8 billion Rainy Day Fund, the Permian Basin Petroleum Association reported that the taxes and royalties paid in 2019 are expected to help balance the state’s budget during the next legislative session.