Thursday, February 13, 2014

Texas's Economy Bright, Looking Brighter

The Texas Taxpayers And Research Association (TTARA) has released its findings on Texas's proposed 2014-15 budget. I'll reveal more of the findings as well as open the discussion on its implications to Texans and the nation as a whole in my inaugural article for The Brenner Brief.

In short, TTARA found the biannual budget proposed to be positive. The organization indicates they predict increased prosperity for Texas over these next two years. In fact, TTARA President Dale Craymer remarked:

"Lawmakers passed a conservative budget that meets the needs of the state, puts us on a sound financial footing, and cut taxes and fees by $1.4 billion."

Of TTARA's report, Governor Rick Perry stated:

"The evidence continues to mount that the Texas way of doing business is the best way of doing business. Our core philosophy of fiscal responsibility has enabled us to address the largest challenges facing our state, like transportation and water, while simultaneously cutting taxes and keeping cash on hand for emergencies. It enables us to meet these challenges from a position of economic strength, with an eye toward continuing our growth well into the future."

Though Gov. Perry is a man of many words, at times, he is a model Texan. His words are not empty boasting, but a seemingly accurate reflection of the economic situation in Texas. Let's take a brief review of indicators and news from just the past few weeks.

While national unemployment (U3) calculations ticked slightly down and workforce participation numbers ticked slightly up, the national rate of "recovery" is still sluggish and far behind where it should idyllically be. In fact, the WPR didn't uptick. It stabilized to the end of November number, a paltry and dismal 63.0%. Nationally, to cover the jobs gap within the remaining 11 months of this calender year, employers across the nation would have to add an average of over 650,000 jobs a month. Last month, the net gain was only 113,000. December's gain was only 74,000. 2013's average was 194,000 per month. The chances of tripling that average with the current federal economic policies currently in place is less likely than winning the Powerball lottery twice in a year.

Meanwhile, Texas is creating jobs at a much higher proportional rate. In fact, Texas is one of the top 5 states for private sector job growth. Reporting suggests that Texas has created more jobs than the state lost during the recession. Now it's remaining jobs gap is just to make up for the increased state population from births and migrations.

Many of those migrations are due to companies uprooting from less business-friendly states and expanding or relocating their operations in Texas. Former Colorado-based Magpul moved to Texas for a number of reasons. One reason was the change in state laws regarding firearms. The other reasons were Texas economic and taxation policies are far more business and employee friendly than Colorado's.

Media Icon Dana Loesch and her Husband, Chris Loesch recently moved to Texas. They are likely finding the lack of a state income tax to be rather pleasing. The state's outlawing of Common Core probably agrees with their education plans for their kids. Chris is a small business owner and operator in the music industry. No doubt, Texas's policies for small businesses are to his liking. Dana has her new show with Glenn Beck's The Blaze. In addition, her radio show is now syndicated, since her move. It seems Texas has been good to the power-couple.

HID Global expanded in Texas and is moving its global headquarters to the state.

Even those of us who normally oppose Keynesian economics are looking at some of the TETF and TEF grants, the capital they are helping generate, and the jobs they are helping create, and thinking "if you are going to use Keynesian policies, this is how you do it".

The downsides in Texas revolve around poor municipal policies. San Antonio and Houston, cities with far-left leaning mayors and city councils, are deep in public debt. They sell bonds and borrow money. They attempt tax increases that most people do not want. In fact, San Antonio passed a small sales tax increase on the lie that it was "for the kids". So far, the Pre-K SA tax hike has not produced the promised increases in public preschool attendance. Meanwhile, attendance in private programs remains steady or is increasing, depending upon which private school's records you review. Giving either of these cities increased purview or shares of taxpayer money is a poor move. It is giving your drug-addict 15 year old unlimited access to your American Express Platinum Card and your gun safe. If it weren't for the successes state-wide and the businesses located in the suburbs, these cities would be facing the dire straits in which Detroit currently finds itself.  

To nail Texas's continuing economic success, Laffer and Moore's comparison and contrast of California and Texas tells a striking story. The numbers and their meaning come as no surprise to Texans. But they do demonstrate a striking example of fortitude and sound economic policies for other states to aspire towards. In fact, Illinois may want to wake-up and take notice before they lose businesses such as Caterpillar, Inc. to Texas's warmer climes.