Oil slump will cost Texas $3 billion in revenue
SMU economist Mike Davis talks about projections that the oil slump will cost Texas $3 billion in revenue.
The slumping price of oil will cost the state of Texas $3 billion in the current budget cycle, according to new figures released by Texas State Comptroller Glen Hegar, News Radio 1200 WOAI reports.
Hegar has issued is first of the year financial forecast, and he says total tax collections in the current biennium will be $110 billion, lower than the $113 billion which he told lawmakers a year ago would be available.
But Hegar points out that it is still above the $106 billion that lawmakers actually allocated.The rest will go into the Rainy Day Fund and other funds to support highway construction and other projects.
"It's probably not good news, but it's probably not the disaster some people expected it to be," SMU economist Mike Davis, who studies the Texas economy, said of the report."We are an oil and gas producing state, but we are also a very diverse economy." . . .
Davis says the state's diversification will lead to continued job growth, although at a slower level than we have previously seen, and possibility at a lever which is slower than the nation as a whole.
"Texas really has created a much more diversified economy than we saw in the seventies, eighties, and the early 1990s," Davis said.
He cites the state's manufacturing industry, which was jump-started by the arrival of the Toyota plant in San Antonio in 2003, as well as a strong construction industry, a solid business services industry, and a high tech industry which essentially did not exist when previous downturns in oil and gas production have led to statewide depressions.