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Volume 16, Issue 34; Aug 15 - 21, 2014<br />

Estimator: Good News for<br />

Texas’s Economic Outlook<br />

“The Texas ECONOMY continues to expand. We’re through recovery<br />

and into expansion.”<br />

That was the good news<br />

brought by John Heleman, chief<br />

revenue estimator for the office<br />

of the Comptroller of Public Accounts,<br />

to the members of the<br />

state’s Legislative Budget Board<br />

(LBB) this week. Heleman offered<br />

a report on the state’s economy<br />

and an overview of Texas<br />

state revenue.<br />

houston<br />

Houstonian Corner<br />

In fact, he said, if Texas were<br />

a nation, the State would have<br />

the 12th largest economy in the<br />

world, slightly behind Canada,<br />

but larger than Australia.<br />

It was good news all around<br />

from Heleman, who reported that<br />

the state’s economy “CONTIN-<br />

UES to outperform” the United<br />

States’ economy. Texas is “continuing<br />

its trend of growing faster<br />

Compiled by Ilyas Choudry, houston@muslimobserver.com<br />

than our nation as a whole.” Heleman<br />

added that the Comptroller<br />

expects to see a little more money<br />

than anticipated in the rainy day<br />

fund, with an anticipated ending<br />

balance of about $8.4 billion for<br />

FY 2015. And, that figure assumes<br />

passage by Texas voters<br />

of Prop. 1 in November, which<br />

would transfer $1.7 billion out of<br />

the rainy day fund for highway<br />

expenditures.<br />

And how is the state’s revenue<br />

system performing? Heleman<br />

offered this analysis:<br />

Sales tax – The state’s largest<br />

tax has grown quickly. Figures released<br />

just this week show fiscal<br />

year-to-date state sales tax collections<br />

are up more than 5 percent.<br />

Motor vehicle tax – Described<br />

as “particularly robust.”<br />

In 2009, there was an “unprecedented”<br />

22 percent decline in one<br />

year during the early part of the<br />

recession. There were few NEW<br />

CAR PURCHASES. Sales tax<br />

receipts are up 6.25 percent this<br />

fiscal year.<br />

FRANCHISE TAX – The<br />

state is nearing the estimated $4.7<br />

billion in receipts. A rate reduction<br />

in effect this year could very<br />

well be extended – and doubled<br />

– next year.<br />

Oil production and natural<br />

gas tax – Tax receipts in this category<br />

are “outproducing what was<br />

The <strong>Muslim</strong> <strong>Observer</strong><br />

11<br />

expected,” largely due to Eagle<br />

Ford Shale.<br />

In spite of these positive<br />

numbers, LBB member Lt. Gov.<br />

David Dewhurst warned that the<br />

state continues to grow in population<br />

by 1.7 percent per year, and<br />

that growth will have an impact<br />

on the money needed to fund<br />

public education and the state’s<br />

“SAFETY net programs.”<br />

In his overview of the state<br />

ECONOMY, Heleman said Texas<br />

entered the recent recession later<br />

than the nation as a whole, exited<br />

at the same time, but lost fewer<br />

non-farm payroll workers than<br />

the United States as a whole.<br />

He said Texas’ current payroll<br />

worker number are up 3.3<br />

percent over the last 12 months<br />

– growing “twice as fast” as employment<br />

growth of the nation.<br />

And, the state’s unemployment<br />

rate of 5.1 percent is a full percentage<br />

point better than the nation’s.<br />

“We still have 31 states that<br />

have yet to recover all their jobs<br />

they lost in the recession,” said<br />

Heleman. “Many states are struggling.<br />

We’re not seeing that in<br />

Texas.”<br />

The Comptroller’s Office<br />

representative said by November<br />

2011, Texas had recovered all of<br />

the jobs it lost as a result of the recession.<br />

The United States, however,<br />

is just now at the same level<br />

of employment as it was six and<br />

one-half years ago.<br />

Regarding housing, Heleman<br />

said the United States market is<br />

“struggling to recover,” while<br />

Texas is doing “somewhat better”<br />

and the inventory on the market<br />

is growing smaller. Regarding<br />

COMMERCIAL office space,<br />

Heleman said the Dallas, Houston<br />

and Austin Class A office space<br />

vacancy rate is below 10 percent,<br />

even with new construction and<br />

higher rental fees.<br />

THE PRICE OF OIL has<br />

“settled down,” according to Heleman,<br />

and is “relatively stable.”<br />

The focus in Texas now is on<br />

crude oil. He explained that there<br />

are currently about 900 rigs in<br />

the state and only 74 of them are<br />

drilling for natural gas. The other<br />

800-plus are drilling for crude<br />

oil, evidenced by the increase in<br />

activity in both the Eagle Ford<br />

Shale area and the Permian Basin.<br />

Later this week, State Comptroller<br />

Susan Combs said she<br />

anticipates there will be at least<br />

$232 million more in revenue<br />

than her official estimate last<br />

year. That excess will likely allow<br />

the State Legislature to extend the<br />

current FRANCHISE TAX cut<br />

for most businesses and increase<br />

it to 5 percent.

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