February 10, 2004
The state of the state's economy

A panel of economists talks to the Legislative Review Board, and it ain't very pretty.

"The reason people question whether the economic recovery is real is because there hasn't been much job creation," said Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas.

Weinstein and three other economists testified to the Legislative Budget Board on how economic recovery would affect state revenue from tax collections. The portrait they drew was bleak, despite an increase in economic activity in businesses.

But...but...we've got zillions of new jobs! Governor Perry told us so! How can this be?

Overall, the news is mixed.

Weinstein told the panel that if job growth is flat, consumer sales tax collections for the state will not sustain major new investments in public education without expanding the sales tax base on personal and business services.

James LeBas, chief revenue forecaster for the state Comptroller's Office, said growth in the state's gross domestic product this year will run about 4 percent, the strongest it has been since 1999.

But LeBas said the state has lost 160,000 manufacturing jobs and 5,000 oil and gas industry jobs in the past three years during the recession.

Private-sector job growth, he said, has been in 33,000 new low-wage jobs in leisure, hospitality and other services.

The biggest area for job growth, LeBas said, has been an additional 119,000 government jobs in the education and health care fields. He said that is mostly new employment in local school districts.

"If we're adding government jobs, we're mostly recycling money that is there," LeBas said. "We're not growing the underlying base economy."

LeBas said a bad indicator for future state sales tax revenues is that per capita personal income in Texas matched the national average during the 1990s, but now it is almost 2 percentage points below the national average. Lower wages mean less taxable consumption.


Austin private economist Angelos Angelou said Texas today is creating jobs that pay wages that are less than what they were two years ago. He said the state especially should be worried about the loss of high-technology white-collar jobs overseas.

Angelou noted that Texas a few years ago had 25 semiconductor plants and now there are only 10. He said Texas needs to invest in technology research and development.

Angelou said the state also needs to invest in primary and secondary schools with an emphasis on creating engineers or nurses to work in the growing biotechnology field. Angelou said more engineers will retire in the next five years in the United States than will graduate from the nation's universities.

So the biggest area of job growth in the past few years has been 119,000 new positions in local school districts, and we're facing a shortage of engineers. That upcoming special session on school finance reform is going to be such a pleasure to watch.

One last item:

In other business, the LBB declared four state budget items emergencies so they could fund them.

Those included $9 million for the Regional Academic Health Center in Harlingen; $2 million in start-up funds for a Texas Tech University medical school in El Paso; $6 million to the Texas Cooperative Extension for wildlife damage and control activities; and $2.5 million to the Texas secretary of state's office for the 2004 primaries.

Funding for the two health care facilities became political footballs during last year's special sessions on congressional redistricting. Republican leaders had hoped to obtain Democratic votes for redistricting by refusing to pass the health care bills until congressional redistricting legislation went to the governor.

Yes, redistricting was a higher priority than hospitals. That's all you need to know about the mindset of our state leadership.

Posted by Charles Kuffner on February 10, 2004 to The great state of Texas | TrackBack

But the Toyota plant! Won't somebody think of the Toyota plant?

My own slogan for the Committee to Re-Elect Governor Perry: "I don't give a fuck, I'm just tryin' to get paid."

Posted by: Norbizness on February 10, 2004 8:45 AM

Kuff, we've had variations of this discussion before. Yes, state legislatures handle many important matters — taxation, criminal and civil laws, schools, hospitals, highways, education, all kinds of public works projects.

There are very few matters, however, that are deemed so intrinsic and vital to the functioning of our small-d federal democracy that they are required of state legislatures by the federal constitution (as it's been interpreted by the Supreme Court). One is Congressional redistricting; another is selecting members of the electoral college that elect the President. The latter is noncontroversial and, from the state legislatures' viewpoint, fairly mechanical; the former is neither. But both have to be done for our system of government to function. And the importance of what gets done, in terms of its impact on our Nation's political process, is unparalleled, as serious observers from both sides of the aisle have already recognized in projecting the likely results of the Texas redistricting process just completed.

There's no shortage of other issues to advocate, nor of other actions of our Lege to that you, as a member of the party currently in the minority, can take potshots at. But for someone who clearly understands the mechanisms of government as well as you do, it simply isn't credible to argue that Congressional redistricting is anywhere other than at the top of any state legislature's priority list.

I know you're unhappy both with the result of the last Congressional redistricting in Texas and the way in which it came about. Yes, I grant you that it ought to have been finished in the 2001 session, and yes, had the 2003 Texas Legislature defaulted in its continuing duty to redistrict, we'd have continued — probably for the remainder of this decade — to elect members of Congress under a map drawn up by a panel of unelected, ill-equipped, and undemocratic federal judges (who, to their credit, well understood and vigorously protested their unfitness for that task). I can understand why you and other Texas Democrats preferred that result this time (since that map largely perpetuated a 1991 pro-Democratic gerrymander, and its continued use would have continued to frustrate the political will of the current Republican majority of Texas voters, as expressed through their elected state legislators).

But you're trivializing something that, whatever else it is, is not trivial. You've done a superb job of following and commenting on the process that has justly won you respect and thanks from your readers. Implied in that was your recognition that yes, indeed, redistricting was extremely important; that's why I've blogged about it so much too. Now that it's done — and from your and your party's standpoint, the long battle has been fought and lost — I respectfully and even affectionately submit that the sour grapes are becoming unbecoming.

Posted by: Beldar on February 11, 2004 3:10 AM

Yeah, Charles,

Shame on your for not realizing that partisan political concerns should triumph over petty issues like hospitals!

After all, what better way to spend millions of state government dollars than disenfranchising blacks, latinos, and rural whites?

Here I am, typing this message in East Austin in a district which runs all the way to West Houston. See how Republicans are working hard to bring us both together?

Now if only we could get past these petty quibblings over corporate money and state campaigns, the plutocrats could lead us all into a Brave New World.

Wouldn't that be fun?

Posted by: DocG on February 11, 2004 12:50 PM

There were many funny things about last session's redistricting, I'll grant you, DocG, from participants on both sides of the aisle.

That it cost millions of dollars, however, was due to the extraordinary resistance mounted by the Democrats fighting to preserve their prior gerrymandering — through extraordinary means there (or more precisely, not there) in the Legislature, and also in court. Their efforts, of course, ended with a federal court determining that they had absolutely failed to prove their claim that the resulting congressional district map was illegal.

You may not like your new district, DocG, any more than did the Republican voters who previously were packed into districts to protect white, male Democratic incumbents like Lloyd Doggett in the prior gerrymander. But no one has been "disenfranchised." That's a loaded and inaccurate term which is best reserved for situations like that which occurred, unfortunately, during the Jim Crow days in which minorities attempting to vote in the South were prevented from doing so by lynching or other violent intimidation, poll taxes, literacy tests, and so forth — intimidation that was legislated, mandated, or otherwise supported by the Democratic party of the time, by the way. The term you may have been looking for was "diluted," and that's apt for all gerrymandering, I'll grant you; but proof of a racist (as opposed to political) motivation for that dilution was exactly what your party utterly failed to make in court.

However, I for one don't begrudge the expenses they caused the State of Texas to incur. As a fraction of the State's overall budget, they weren't very large. And the subject matter was important, for the State and the Nation.

Posted by: Beldar on February 12, 2004 4:22 AM

Well, Beldar, I thought I had stated in no uncertain terms that I didn't like my new congressional district. There's no "may not like" to it. Furthermore, just how does Doggett's previous district merit the term "gerrymandered"? District 10 was pretty damn compact, covering most of metro Austin. Thus ensuring that my home town has congressional representation, what a novel idea that the state capitol city should have a fairly compact district. Please illustrate how a district that was entirely within one county was "gerrrymandered."

Furthermore, where was the great outcry from Republican citizens in Texas about the previous map? Oh, we heard lots of wailing from the Republican elected officials, but public hearings on the subject generally turned up squat as far as public protest against the (then current) map.
As a matter of fact, polls (and elections) seemed to show that lots of rural Republicans were very happy to stick with their (often quite conservative) Democratic representatives. Charlie Stenholm was a good example of this.

And finally, yeah, I'm sure it was JUST coincidence that this map happened to "dilute" the political voice of minorities. Whoops! says the Republican machine, "who knew that would have happened?" In all honesty though, I'm sure the Texas GOP is happy to screw the poor and the democratically-inclined of any ethnic persuasion--they are equal-opportunity plutocrats.

Posted by: DocG on February 12, 2004 8:59 AM

Indeed! Be honest, DocG! The redistricting just completed was indeed based on politics. To suggest otherwise, even sarcastically, is race-baiting. It's devisive, it's ugly, and it's bigoted in its own way. Continue to rise above that impulse, sir!

Re public hearings, those are stage-managed jokes — a game that both sides play out when they want to justify a press release or manufacture evidence for a later court record. The public, if they're very civic minded, turn out for elections. Ours is a representative, not a direct, democracy.

Finally, I'll grant you that Doggett's former district was not the best example of gerrymandering from 1991. Sodom-on-the-Colorado — er, I mean Austin and Travis County, doesn't need much help in keeping Republican votes diluted. (But seriously, I love Austin, like most UT grads; we need our own Berkeley, I guess, to stay competitive with California.) I mentioned Padrón Doggett just because of the current spectacle of his running in a majority-minority district that was intended — to satisfy Voting Rights Act concerns — to produce a Hispanic Congressman. I long for the day when Congressmen can be judged by the content of their characters instead of the color of their skins, though, so maybe if he wins it's a step in the right direction.

As a whole, however, no serious observer can doubt that the 1991 map, which was largely continued through the Balderas decision in 2001, was creatively gerrymandered to protect incumbents, most of whom were Democrats.

Posted by: Beldar on February 12, 2004 9:32 AM