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Economic crisis blocked at state line

winnar111

Banned
Mar 10, 2008
2,847
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http://www.easttexasreview.com/story.htm?StoryID=5849

With more than half of the 50 United States of America bogged down with financial woes, Texas is weathering the monetary collapse much better than most. This is a testament to the Lone Star State?s political and economic leaders? ability as they fight off the massive recession that has most of America and the rest of the world strapped. Mary Scott Nabers is president and CEO of the Austin based government relations procurement consulting firm Strategic Partnerships, Inc. She is clear on the main reason for the resiliency of the state?s overall cash flow.

?The diversity of the state?s economy is allowing Texas to withstand the current instability seen in the national economy, and that is good news for vendors,? she said.

California legislators are struggling with a budget deficit of more than $22 billion for Fiscal 2009, which started last June. New York State?s spending has outstripped its income, leaving it with a $4.9 billion deficit for the fiscal year, while Florida politicians have a $3.4 billion deficit on their hands. Financially ailing states are turning to such extreme measures as heavy borrowing at higher-than-average interest rates, sweeping spending cuts and dipping into Rainy Day Funds and other reserves. These deficits are increasing while revenues are depleting, but Texas is staying afloat.

The legislature will convene in Austin in January, and the lawmakers will enjoy a rare advantage--a budget surplus estimated at $10.2 billion with another $7 billion in the Rainy Day fund. This will provide a boon in business opportunities for service providers and vendors.

* Texas has low taxes, no income tax, and moderate regulations, making it an attractive location for doing business. CNBC and CEO Magazine both listed Texas as the best place to do business in 2008. Financial Times ranked Texas as having the nation?s best state economy.

* The state?s reserves of oil and natural gas bring in additional capital.

* Sales tax revenues are still strong.

* Texas? status as a pay-as-you-go state insures a balanced budget and no deficit spending.

* The $200 million Texas Emerging Technology Fund invests in companies and universities that attract high-tech jobs and helps new companies survive until they become profitable and self-sustaining. The Texas Enterprise Fund recruits and nurtures new business, resulting in 51,600 new jobs and $13.6 billion in capital investment.

* Over the past five years Texas has created 1.2 million new jobs. Nearly half the new jobs created in the entire United States this past year have been in Texas.

* The unemployment rate in Texas is far lower than the national average. While national unemployment rates worsen, Texans? employment rates are improving, with 252,000 new jobs created during the past 12 months.

?Simply put, this means that as 2008 winds to a close, Texas, more than any other state, is a prime focus area for business opportunities for vendors,? said Nabers.



It's a shame other states have not followed the Texas model of government. While other states have doubled government spending of worse over the past 15 years, Governors Bush and Perry haven't made that mistake.

Low taxes and pro business has proven to be the way to go, while states that pile on healthcare spending are struggling.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
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Pretty impressive. I understand their laws make deficit spending illegal, right? Is that in all cases? If only NY state--if only the US would think of such a thing.
 

MovingTarget

Diamond Member
Jun 22, 2003
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IIRC, Texas isn't the only state that requires a balanced budget. The funded rainy-day fund was something that they should be commended for, but somehow I think something else is at work concerning their surplus. Either they simply don't provide the services that other states provide, or they have had a glut of revenue the past few years that have passed by other states. Somehow the "pro-business" stance Texas takes may not fly well in other states. Within the South, which is typically pro-business (also anti-union for the most part. Go figure.), other states have businesses flocking to them for these attitudes as well. Yet, they have somewhat similar taxes but still lower revenues. So while we attract all of the rust belt's auto industry, (or certain lucrative Air Force tanker operations...har har) and expand our industrial base that has been devastated the past few decades, the surpluses haven't materialized. I'm not saying anything sinister is at work, just that there is more to meets the eye concerning this article.
 

Thump553

Lifer
Jun 2, 2000
11,895
1,235
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Every state prohibits deficit spending. Some temporarily get around it by voodoo accounting, but eventually the problem comes home to roost.

I strongly suspect that if you dug a little deeper you would find that Texas brought in mucho bucks from oil and gas in the last year. That coupled with nearly nonexistent spending on social services should make it easier to balance the budget.

As I recall, back in the S&L crisis days, Texas had one of the worst deficit situations around.
 

techs

Lifer
Sep 26, 2000
28,563
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I guess 140 a barrell oil didn't have anything to do with it? :shocked:
 

jersiq

Senior member
May 18, 2005
887
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Originally posted by: MovingTarget
IIRC, Texas isn't the only state that requires a balanced budget. The funded rainy-day fund was something that they should be commended for, but somehow I think something else is at work concerning their surplus. Either they simply don't provide the services that other states provide, or they have had a glut of revenue the past few years that have passed by other states. Somehow the "pro-business" stance Texas takes may not fly well in other states. Within the South, which is typically pro-business (also anti-union for the most part. Go figure.), other states have businesses flocking to them for these attitudes as well. Yet, they have somewhat similar taxes but still lower revenues. So while we attract all of the rust belt's auto industry, (or certain lucrative Air Force tanker operations...har har) and expand our industrial base that has been devastated the past few decades, the surpluses haven't materialized. I'm not saying anything sinister is at work, just that there is more to meets the eye concerning this article.
It's been a couple of years since I took my government class at a Texas College, so if I am wrong please someone correct me.

From what I understood, there are extreme limitations in the Texas Constitution on what monies can be spent from revenues. The example I was given is that the state owned a bunch of land in Bryant College area. If they were to sell the land (which is high-demand apparently) the revenues earned can ONLY go towards some higher education expenses. However, the estimated amount is still tallied up in the revenues. If there is to be a shortfall, then the program is simply cut.

Now, if I am wrong, someone please feel free to correct me.
 

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