Texas’s revenue is currently the highest in the nation with over 32 billion dollars in surplus.
Only seven countries in the world have a gross domestic product larger than Texas: China, India, Japan, United Kingdom, Germany and France. With so many sources of revenue flourishing and the current record breaking surplus, Texas is set to surpass France becoming the seventh locale with the highest GDP by the end of 2024. According to the Texas Comptroller’s Office, the largest source of state funding comes from state taxes of daily purchases made by locals. The surplus makes more sense when you consider that, in Houston alone, the population has grown by over two hundred thousand new documented residents over the last two years. Meaning the revenue from state taxes has significantly increased simply due to the increase in population over the recent fiscal years. Fiscal 2023 brought in over $82 billion dollars from state taxes alone.
Taxes aren’t the only profitable source in Texas. Texas has always been a major player in the oil and gas industry and is currently the global leader in petrochemicals. Other industries that earn the highest revenues for the state include transportation, warehousing, business services, education & health, leisure & hospitality, manufacturing, financial services, construction & energy, and information & technology. The state’s exports have helped to diversify its economy and reduce its reliance on domestic markets, making it more resilient to economic downturns. Texas exports have played a key role in strengthening its trade relationships with countries around the world, fostering economic growth and promoting international cooperation.
The Site Selection’s Governor’s Cup ranked the Lonestar State as the number one top performing state for job-creating business relocations and expansions. Texas’s robust job market and pro-business environment have attracted businesses from all across the country. In the last three years, more than fifty Fortune 500 companies have established their headquarters in the Lone Star State. According to Forbes, the top ten of those companies include Walmart, Amazon, Exxon Mobil, United Health Group, Chevron, Apple, CVS Health, and Berkshire Hathaway. Exxon Mobile is ranked third on Forbes 2023 Fortune list with a grand total of $413 billion in revenue in 2023. Texas added the most jobs in the nation in the last year, adding over 270k jobs between March 2023 and March 2024. The employment rate is at an historic high with 14.5 million working Texans including those who are self-employed. The Houston Chronicle recently announced itself to be amongst the world’s wealthiest cities due to the high amount of wealthy residents. Its analysis states there are nearly 100,000 millionaire residents in Houston. There are nearly 300 centimillionaires, which are those who’ve earned a minimum net worth of $10 million. Forbes has listed twenty nine Texans who have made the billionaire’s list, eighteen of them choosing Space City as their home.
The Texas constitution requires the Comptroller of Public Accounts to share the financial condition and estimations of the state annually. The estimations include a budget plan for the upcoming two years based on projected revenue called the biennial revenue estimate, BRE. The fiscal year 2024 began September 2023. The revenue statement for 2024-2025 was released in October of 2023. It shows Texas will have a total $194.57 billion in general revenue related funds available for our current year 2024.
The Comptroller Office states in the letter, “This revenue will support general-purpose spending of 176.28 billion for the 24-25 biennium, resulting in an ending general revenue related certification balance of $18.29 billion.”
There’s no obligations set for the current surplus of billions. Legislators choose whether the funds will be spent this year, carried over into the concurring budget, or whether the money should be left alone. So far Texas legislators have used over $3 billion from its general revenue fund towards the Economic Stabilization Fund (ESF) and an estimated $2.76 billion towards the State Highway Fund (SHF) for fiscal year 2025 from severance taxes collected in 2024. Other decisions have included $500 million dollars towards incentives within K-12 school districts, specifically for hiring teachers and purchasing new materials. Another $690 million is planned to continually fund the workforce through education. This plan makes room for low-income residents to earn certifications and licensing at community colleges to attain a better income or new career in a high-demand job. As helpful as trade skills and new teachers sound, there are many residents who feel the billions being spent on roads and highways could be of better use through the communities. Access to affordable healthcare, quality childcare, reasonable rent, electricity and gas are all issues Texans have been sounding off on as missed opportunities the state could use the surplus for.
Texas agriculture revenue also has a rich history that dates back to the early days of the state’s settlement. The fertile land and favorable climate in Texas have allowed agriculture to thrive, making it a crucial component of the state’s economy. Over the years, Texas has become a powerhouse in agricultural production with one of the largest selections of crops and livestock. The Texas Farm Bureau’s census shows there are over 230,000 acres of farm land being actively used in 2024. The average farm being 544 acres each. The Farm Bureau states on their research, “Texas remains a top producer of cattle, sheep, goats, horses and dry hay. Texas remains the state with the most farms and is ranked third in total value of agricultural production behind California and Iowa at $32.2 billion.” As the population continues to grow, there will be increasing demand for food and other agricultural products, presenting new opportunities for Texas farmers and ranchers. The state’s fertile land and favorable climate have made it an ideal location for farming a wide variety of high demand products, there’s no foresight of this ending anytime soon. Looking ahead, the future of Texas’s economy is promising, with continued growth and diversification expected in the coming years. The state’s strong business-friendly environment, skilled workforce, and favorable location make it an attractive destination for companies looking to expand or relocate. Investing in key industries and supporting small businesses have helped the state continue to thrive and maintain its position as a powerhouse in the global economy. Legislators are expecting Texas to have 21.3 billion in revenue to be available for 2025.
