Lower Oil Prices Could Impact Texas Legislative Session
Oil and gas prices are down, just in time for holiday travel. But that also means less revenue for the state. How might this impact the upcoming legislative session?
Bob Tippee, editor for the Oil and Gas Journal, a trade publication based in Houston, said there are easy explanations for low oil prices.
“The market is oversupplied and needs to have some production cut back, but also some external psychological factors like concern about the stock market,” Tippee said.
He expects the price oil to eventually rebound,but this economic problem is also a political problem.
The state grows its Economic Stabilization Fund, or the Rainy Day Fund, by collecting oil and gas tax revenues. And lawmakers in the Texas House and Senate have hinted that they may use it to help fund an expensive legislative session, which includes funding for Harvey rebuilding efforts, tax relief and school finance reform.
Mark Jones, who teaches political science at Rice University, said low oil prices slow down the growth of the Rainy Day Fund, and that makes nervous Republicans extra cautious.
“As oil is below $50 there is going to be some real reluctance to tap the Rainy Day Fund too much because that becomes perpetual in that the funds may not be there when they need them if they siphon money for public education in addition to the money that is already being siphoned off for state highways,” Jones said.
Jones explained that Republicans were roughed up in the midterms in part because voters didn't hear how the lawmakers would deal with the state public school finance system.
Now, Republicans want to use money from the Rainy Day Fund to address that issue, but maybe not if low oil prices don’t replenish the fund quickly.
The legislative session begins on Jan. 8.