Ask most Texans where their child’s school gets its funding, or who paid for the highway they took to work this morning, and few would name the oil and gas industry.

Yet in fiscal year 2025 (FY2025), the Texas oil and natural gas industry paid $27 billion in state and local taxes and state royalties. That is the second-highest total in Texas history and more than the entire tax revenue of 34 states. Whether a family lives in Midland or McAllen, or a community in between, nearly $74 million a day from the oil and natural gas industry flows into essential government services.

Education is the largest beneficiary. Texas school districts collected $2.6 billion last year in property taxes on producing mineral properties, pipelines, and gas utilities. That revenue lessens tax burdens for homeowners and businesses and puts more teachers in classrooms.

The longer-term impact is even greater. Oil and gas revenue is the primary source of new money for the Permanent School Fund and the Permanent University Fund, which received $1.4 billion and $1.72 billion, respectively, in FY2025.

The Permanent School Fund alone holds more than $66 billion, making it the largest educational endowment in the country, larger even than Harvard’s. Together, these endowments now exceed $100 billion. That money supports public schools and higher education for generations of Texans, and it will continue to do so long after any single drilling cycle ends.

Texas counties received an additional $1 billion in property taxes from oil and gas properties last year, and this number excludes property taxes paid on refineries and office buildings. Those dollars support sheriffs’ offices, emergency services, and county roads, especially in rural communities where the industry is often the largest taxpayer. When a volunteer fire department gets a new truck or a county repaves a farm-to-market road, there’s a good chance revenue from the oil patch helped pay for it.

Texas businesses and their success depend on moving goods and people efficiently, and that requires good roads. In FY2025, the State Highway Fund received $2.7 billion from oil and gas production taxes. That money helps build and maintain the corridors that connect homes to schools and jobs, ports, distribution centers, farms, and fast-growing suburbs. For employers deciding where to locate or expand, reliable infrastructure is a deciding factor, and no industry contributes more than Texas oil and gas.

The Economic Stabilization Fund, better known as the Rainy Day Fund, also received $2.7 billion last year. Since 1987, oil and gas production taxes have contributed more than $35.9 billion to the nation’s largest state savings account. That reserve gives lawmakers room to respond to natural disasters, economic downturns, and emergencies without tax hikes – the kind of fiscal stability that underpins the state’s strong credit and business climate.

Taxes paid to fund services are enormous, but the money put in employees’ pockets is the real driver. More than 495,500 Texans hold direct oil and gas jobs, earning an average of $133,000 a year, 68 percent more than the rest of the private sector. Those paychecks ripple outward, supporting an estimated 1.4 million jobs statewide. Per employee, the industry generates 7.5 times more tax-like revenue than the rest of the private sector.

Since 2007, the industry has paid more than a quarter-trillion dollars in state and local taxes and state royalties. That steady revenue is a big reason Texas can fund schools, roads, and public safety without a state income tax, an advantage that attracts companies and workers from across the country.

Keeping that advantage depends on policy. Predictable regulation, sensible permitting, and continued investment in critical infrastructure, including pipelines, water systems, and the electric grid, will determine whether the industry can keep delivering at this scale.

The oil and natural gas industry helps pay for Texas schools that train the next generation, Texas highways that move people and goods, and Texas reserves that protect taxpayers in hard times. Every Texan benefits from a state that funds those services without an income tax, and no industry does more to make that possible. Texas oil and gas is a trusted partner in keeping Texas a state we are all proud to call home.

Todd Staples serves as the President of the Texas Oil & Gas Association (TXOGA). Founded in 1919, TXOGA is the oldest and largest oil and natural gas trade association in Texas, representing every facet of the industry.

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