Newsletter: The Slowdown We Expected
A couple of key indicators have recently shown that the Texas economy is slowing down.
Because we have wisely decided as a state not to have an income tax, the sales tax is a primary revenue source for education, transportation and other services the state provides. But in six of the last nine months, sales tax collections declined compared to last year.
Also, just 200 jobs were created in the state last month. This was, of course, the same month that job creation across the entire country fell dramatically short of expectations.
With the next legislative session about six months away, I take these numbers seriously. Helping our private sector succeed and create jobs has long been one of my top priorities, and I'm proud of the steps we've taken to strengthen our economy now and in the future. But continued contraction in the oil and gas sector is clearly having an impact. And last week's decision by British voters to leave the European Union could have a sizable effect on the global economy, which would of course affect Texas as well.
Fortunately, the Legislature left about $4 billion in the bank when we last met, and that will make it easier to balance the next state budget. Still, we are going to have to remain disciplined in our use of taxpayer funds. We will continue to scrutinize state agencies closely in order to increase efficiency.
The House will also look at steps we can take to make our private sector stronger. House committees are studying a number of issues right now that directly relate to private sector growth, from issues affecting small businesses to the impact of federal regulations to the availability of skilled workers. In the months ahead, those committees will recommend ways that we can address these issues and encourage private-sector growth.
I'm realistic about the challenges we face. But I have confidence in our preparation and our approach, and I believe that the Texas economy will emerge from this moment stronger than ever.