Comptroller Glen Hager announced this week that Texas experience its 14th consecutive month of job growth in August. Here is some number on the state of Texas economy. Employment rose by two and a half percent for the year ending in August, more than double the rate in 2016.
Our employment growth rate, first among states in year over year net change, about 300000 jobs. The trade, transportation and utilities category saw the biggest expansion. Construction and manufacturing were second and third respectively. Manufacturing’s 4.2 percent annual job growth rate with his largest year over year increase since March of 2012. Incidentally the Federal Reserve Bank of Dallas noted recently that Texas second quarter job growth rate was the state’s fastest since 2014. Of course these numbers don’t fully account for the effects of Hurricane Harvey. I have seen loss estimates from $70 to $190 billion in economic losses. As much as 31 percent of total U.S. refining capacity, much of it in Houston. Was either taken off line and reduced dramatically because of Harvey, according to CNBC.
Railroad commissioner Ryan Sitton though says “That while some refineries did shut down or operator reduced capacity due to flooding, our energy infrastructure is recovering quickly. Most refineries have now come back on line. And 40,000 Texans are headed back to work”. One more note on Harvey, government Greg Abbott has said “That the state won’t tap into the rainy day fund to help with the current recovery efforts until the next legislative session. If they do so at all.” Houston is expected to tap what they call tax increment reinvestment zones to cover cost. The state has put in $100 million dollars to help clean up debris in Houston.
On the state budget front, unless oil prices rebound dramatically the next fiscal year is gonna look a lot like the current one, that is very tight particularly given the increasing pressure that Medicaid is applying to states spending. The Texas business community and our elected leaders will need to be engaged on that subject and even get creative when it comes to economic development. Whether it’s creating a vibrant domestic venture industry here in Texas or landing major deals like that second Amazon headquarters, expected to be announced in the first quarter of 2018. None of this is slowing down our job growth in the near term.
In recent months Governor Abbott has announced major projects with companies like Charles Schwab, Pei Wei, McKesson, Formosa Plastics and Boeing. One federal note with impact to Texas, tax reform proposals being considered by Congress could be a tremendous boon to our and the U.S. economy. Companies who have stockpiled cash overseas could bring that money home to pay a one time 10% tax on that money. Rather than the 35 percent corporate rate that would otherwise apply. The repatriated money could be used on share buybacks, dividends, acquisitions and capital spending. Companies with significant Texas presence would be affected. Apple, Caterpillar, Google, Visa and Oracle have a significant cash holdings overseas that could be liberated and spent here at home. And finally, most new state laws go into effect on September 1.
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Craig Casselberry is founder and president of Quorum Public Affairs, Inc. and a 20-year veteran of Texas politics. As president of Quorum Public Affairs, Casselberry has managed more than 100 strategic communications projects, issue coalitions, and federal, state and local public policy campaigns for corporate clients of all sizes. You can learn more about Craig HERE.