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Texas has emerged from the Great Recession but economic growth will continue to be slow, in part because of hesitant consumers, the state comptroller's top revenue estimator told lawmakers Wednesday.
John Heleman told the House Ways and Means Committee that companies will continue to add jobs, but he cautioned that Texas still has a long way to go before returning to pre-recession levels of employment and economic growth.
"We've added here in Texas more than 90 percent of all of those jobs that were lost. By the end of the year we should be getting quite close to our pre-recession employment peak of 10.6 million jobs," Heleman said. But he cautioned that Texas's population has grown in the last three years, bringing many more people to the state looking for jobs.
Housing construction will remain flat, he said, because there are more new homes than there are buyers.
"It will probably be at least a year, more probably at least two years, before we start to get to the situation where we will see a significant increase in the number of new homes under construction," Heleman said. "We have so much inventory, and so little demand, it's going to take a long time to get back."
Consumer confidence also remains low, he added. While there has been a recent jump in sales tax revenue, it remains below 2008 levels and will probably not jump again in the coming year.
"Retail trade is probably going to soften a little bit," Heleman said, adding that oil field sales tax revenue is going to flatten out. "The year of (2012) is not going to be a great recovery year, it's still going to be flat-ish. It's still going to be soft."
Heleman said the oil and gas industry remains the bright spot, with a record number of rigs working in the state. He also said he expects demand for natural gas to rise and the oil and gas industry to remain strong.
"There has been a significant amount of drilling expansion," Heleman said.
The Ways and Means Committee hears testimony from the state comptroller's office on a regular basis to monitor the state's economy and revenues. Next week it will hear how well actual revenues have kept up with what was forecast during the legislative session.
The committee's chairman, Rep. Harvey Hilderbran, asked about the state's various exclusions, exemptions and discounts on state taxes as well as how well they are enforced.
"The value of these things is an open-ended question. I don't know how we're going to address that," Hilderbran, R-Kerrville, said.
An official from the comptroller's office, Bryant Lomax, replied: "Every legislative session offers the opportunity to do that."
Hilderbran said he will consider a review of all the tax breaks the state offers.
Texas faced a $27 billion budget shortfall and cut nearly $15 billion in spending. Experts say that the state will likely face a budget shortfall of at least $6 billion in the next two-year budget cycle when the Legislature returns in 2013.