Recently, the grassroots organization North Texans for Natural Gas released a report entitled “Fracking Funds Texas Schools” examining the economic impact of shale gas development on Texas’ education funding system for the fiscal year 2015.
According to the report, Texas public schools and universities are financed through multiple state funds, two of them being the main sources of revenue for the education system – the Permanent School Fund and the Foundation School Fund. For the fiscal year 2015, the Permanent School Fund is worth $34.5 billion, of which $676 million results from oil and gas revenue that was collected in 2014. As for the Foundation School Fund, it is estimated to be worth more than $1 billion.
Property tax revenue from oil and gas producing lands also represent a significant source of income for the independent school districts. According to the study, “there are at least 230 districts where oil and natural gas producing properties generated at least $1 million in property tax revenue in [fiscal year] 2014.” With regard to Texas universities, they usually receive a share of royalty money deposited in the Permanent University Fund “established in 1839 when 2.1 million acres of land in West Texas were set aside to help pay for higher education.” In 2014, the Permanent University Fund was worth over $1 billion.
The authors contended, however, that “[w]ith oil and gas revenues contributing significantly to state budgets, it’s necessary to acknowledge that current market conditions will have some budgetary impacts moving forward.”
Written by Chloe Marie - Research Fellow