Next come the state's oil and gas production taxes. Today, the Oil Production Tax is levied at 4.6 percent of the value of production. The Natural Gas Production Tax is levied at a rate of 7.5 percent of value. Together, these six taxes routinely account for 85 to 90 percent of all Texas state tax revenue. Other significant state taxes include the cigarette and alcoholic beverage taxes, the insurance premium tax, the inheritance tax, various utility taxes, and the hotel occupancy tax.
Federal receipts are second only to taxes as a source of state revenue.
Medicaid, for example, is currently matched at a rate of about 63 federal cents for every 37 state cents. Federal aid to Texas increased rapidly during the 1980s, due mainly to expansions in transportation and human services programs. However, welfare caseloads have declined and Medicaid caseloads have not grown as much as anticipated, leading to a slower rate of growth of federal dollars coming into the Lone Star State. Moreover, Texas spends relatively little to match programs for which the amount of federal aid received depends on the amount of state aid dollars spent. Other major non-tax sources of revenue include miscellaneous fees and charges, such as motor vehicle and college and university registration fees, interest and other investment earnings, and income from state lands.