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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.