Even with record-high oil prices, the state treasury isn't awash in oil money, as it was in the days when black gold was the undisputed king of the Texas economy.

But those high prices have sparked a 58 percent jump in oil production tax receipts so far this fiscal year, helping fuel what state leaders hope will be a large surplus for the 2009 legislative session.

Natural gas production taxes are up by almost 30 percent, and higher energy royalties also have boosted Texas' educational endowments.

Overall, though, spiraling energy costs have produced a mixed bag for state government.

Despite what some people may think, the state isn't getting a windfall from high gasoline prices, because unlike the production taxes, which are keyed to prices, the state gasoline tax is a flat 20 cents per gallon and hasn't been increased since 1991.

And gasoline costs are straining some state agency budgets, as they are consumer pocketbooks, but on a much larger scale. School districts also will be hard hit when they start busing students to classes when the new school year begins later this summer.

Between last Sept. 1, the start of fiscal 2008, and May 31, state agencies spent $68.2 million on motor fuels and lubricants, an increase of $13.3 million, or 24 percent, over the same period in 2007, the state comptroller's office reported.

And some officials believe higher transportation costs may be at least partly to blame for increases in food costs at some state institutions.

The Department of Public Safety alone spent $8.5 million on gasoline by April 30, mostly for its highway patrol fleet. That was $1.4 million more than the agency had been appropriated for the entire fiscal year, which ends Aug. 31.

Spokeswoman Tela Mange said the DPS, so far, is covering the extra costs with money saved on vacant positions, but she said the understaffed agency also was working to expand its officer force.

"We're an army that runs on our vehicles. We're still out there. We haven't cut back on any patrols because, unfortunately, we haven't noticed anybody slowing down," she said.

4 percent of revenue

Ever since the 1980s oil bust and resulting economic diversification in Texas, oil and natural gas production taxes have accounted for a relatively small percentage of total state tax revenue ¡ª less than 4 percent in fiscal 2007. But rising prices have helped boost the economy enough to prompt Comptroller Susan Combs to predict a $10.7 billion surplus when the Legislature convenes in January.

Some $5.7 billion of that is forecast for the rainy day fund, a special savings account that can be spent only with a supermajority legislative vote. The size of that fund is directly affected by oil prices, because oil tax revenue above a certain level is automatically dedicated to it.

Job market grows

Oil and gas employment in Texas grew by 7.5 percent during the 12 months ending in March, leading an overall increase of 214,000 jobs in the state, comptroller's spokesman R.J. DeSilva said.

That expansion was among factors fueling an increase of almost 6 percent in state sales tax collections, the single biggest source of state tax revenue, during the first nine months of this fiscal year.

Texas still has a significant amount of oil and gas production, and it has increased with higher prices, said Bill Allaway, a former revenue estimator for the state who now is president of the Texas Taxpayers and Research Association, a business group.

But, he cautioned, oil prices may get so high that they start to dampen economic activity. When oil and gasoline prices start forcing consumers to significantly cut back on discretionary spending, sales tax revenue will start to drop off.

"There's some squeezing that's going to take place," Allaway said.

Perhaps the biggest irony of high energy costs is the state's inability to cash in on gasoline prices that have hit $4 a gallon and more.

Motor fuels taxes (on gasoline and diesel), which don't increase with prices, had the smallest percentage increase (2.6 percent) of any state tax between Sept. 1 and May 31. The sluggish growth also may reflect reduced driving by many motorists.

This has been particularly troublesome for the Texas Department of Transportation, because motor fuels taxes are a major source of its funding. Three-fourths of the fuel tax revenue is dedicated to TxDOT for highway construction and maintenance, and one-fourth goes to public schools.

Highway costs rise

While its revenue source has had only modest growth, TxDOT has been receiving highway bids swollen by the rising cost of oil-based construction supplies.

The price of liquid asphalt, a major component of highway construction, has almost doubled ¡ª from $332 to $635 a ton ¡ª within the past year, said John Barton, TxDOT's assistant executive director for engineering operations.

State budget experts don't know yet what the total impact higher energy costs are likely to have on state agencies and school districts. The Legislative Budget Board will work later this summer and fall to determine that as it prepares spending recommendations for the Legislature to consider next year.

Increasing funding

Any shortfalls in agency budgets likely will be handled in a supplemental appropriations bill after lawmakers convene in January.

The Legislature will be under pressure to increase the state's transportation allotment for school districts. That formula hasn't been increased since 1984, when gasoline and diesel fuel costs were much lower.

School officials don't have a statewide estimate of higher bus fuel costs. A sampling of districts indicates that some may be reducing field trips or combining bus routes.

Spokeswoman Kelli Durham said Cypress-Fairbanks Independent School District expects to budget $4.2 million for fuel costs in the 2008-09 school year, compared with $2.4 million in 2007-08.