Bloomberg News

Texas Economy That Fueled Perry Bid to Slow, Estimator Says

September 28, 2011

Sept. 28 (Bloomberg) -- The Texas economy, which helped fuel Governor Rick Perry’s bid for the Republican presidential nomination, is stalling as sales-tax receipts grow more slowly, the state’s chief revenue estimator said.

Next year “won’t be a great recovery,” John Heleman, who works in the office of Comptroller Susan Combs, a Republican, told the House Ways and Means Committee in Austin today. “It’s still going to be flat.”

Texas has led the U.S. in employment growth, adding 406,000 jobs since December 2009, according to data compiled by Bloomberg. While Perry has cited the gains on the campaign trail, opponents including former Massachusetts Governor Mitt Romney have faulted the state for having the most minimum-wage jobs and the lowest health-insurance coverage rate in the U.S.

Sales-tax receipts in Texas grew by 9.4 percent in the year ended Aug. 31 as consumers increased spending and oil and gas companies bought more drilling equipment, Heleman said. Next year, though, receipts in the second-most populous state will rise “at a substantially lower growth rate,” he said, without mentioning a specific number.

Texas’s sales-tax receipts have declined in four of the past 10 fiscal years, Heleman said, blaming volatile economic conditions.

While the U.S. added no jobs in August, Texas lost about 1,300, Heleman said, citing U.S. Labor Department statistics. The state has recovered about 90 percent of the jobs lost during the recession that ended in June 2009, compared with about 20 percent for the U.S. overall, he said.

Economic activity in Texas rose for a fourth consecutive month in June with employment approaching 2008 peak levels, before the effects of the recession took hold, Robert Dye, chief economist at Comerica Inc. in Dallas, said in an August report.

“Job growth, increased drilling activity, firm trade and retail sales have contributed to a solid three quarters of economic growth in Texas,” Dye said in the report.

--Editors: Ted Bunker, Mark Schoifet

To contact the reporters on this story: David Mildenberg in Austin at dmildenberg@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus