Richard Fisher, the president of the Federal Reserve Bank of Dallas, dropped by our offices this week and relayed a remarkable fact: Some 37% of all net new American jobs since the recovery began were created in Texas. Mr. Fisher's study is a lesson in what works in economic policy—and it is worth pondering in the current 1.8% growth moment.
Using Bureau of Labor Statistics (BLS) data, Dallas Fed economists looked at state-by-state employment changes since June 2009, when the recession ended. Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state. New York was second with 98,200, Pennsylvania added 93,000, and it falls off from there. Nine states created fewer than 10,000 jobs, while Maine, Hawaii, Delaware and Wyoming created fewer than 1,000. Eighteen states have lost jobs since the recovery began.
Texas continues to outpace the nation in job growth and economic development. Dallas Federal Reserve President and CEO Richard Fisher was on CNBC this morning praising the policies implemented in Texas that have positioned our state for economic success. He specifically pointed to the state’s successful tort reform efforts, as well as its low taxes and reasonable regulatory climate.
Chairman Fisher: "Since the recovery began, 38 percent of all the jobs created in America have been created in the state of Texas...the most important thing that has happened to us is tort reform."
Once again, those observing Texas' strong economy are crediting Governor Perry's fiscal conservative leadership. This time the kudos come The Wall Street Journal's Political Diary. In "Texas Shows the Way," published on May 19th, the article points out that in these tough economic times, our state continues to only spend what it can afford. What's more, Texas gets credit for getting more bang for its buck when it comes to education. Now that's the definition of fiscal conservative!
Please read the WSJ's Political Dairy entry below...
Texas Shows the Way
Texas lawmakers often take pride in providing a strong contrast to California's tax-and-spend politicians. So it's not surprising that Texas Republicans are seeking to close their two-year $23 billion budget gap by cutting education and not raising taxes.
The Texas House budget lops off $8 billion from education, and the Senate plan cuts $4 billion. Last year, school budgets totaled $51 billion, $23 billion of which came from the state. The state's cuts might not be as tough for districts to swallow if student enrollment weren't skyrocketing. But over the past decade, Texas's school aged population has grown by roughly 30%. According to one survey, the state enrolls 500 new students every school day.
Last week Jim Pitts, the GOP chairman of Texas's House Appropriations Committee, warned the legislature that many schools could be forced to shut down eventually if lawmakers don't appropriate more money for education. Teachers unions have also warned that the budget could result in between 80,000 and 100,000 layoffs.
Since state law caps local property tax rates, districts can't raise them when state funding decreases. In 2001 a number of school districts sued the state arguing that it violated a constitutional mandate to adequately fund education. The districts won that case, which could serve as a precedent for future lawsuits.
Yet it's important to maintain perspective. The National Education Association reports that Texas spends $9,227 per pupil, or roughly $1,300 less than the national average, but still more than what either California or Florida spends. Texas also seems to get more bang for its buck. According to a federal National Assessment of Education Progress report, Texas has higher math and writing test scores and a lower pupil-teacher ratio than the national average.
Lone Star Republicans say that education cuts will only be temporary and that the state's economic resurgence will restore funding in the next couple of years. They have good reason to hope so. Texas accounted for 17% of the nation's job growth in March. While other states are raising taxes to spare education, Texas's low tax base will spur economic growth, which over time will provide more revenue for schools.
Governor Rick Perry today issued the following statement on Comptroller Susan Combs' Revised Biennial Revenue Estimate:
"The revised revenue estimate shows the strength of Texas job creation and economic growth, but it does not mean lawmakers can abandon necessary budget reductions. Just as Texas families and employers have had to tighten their belts during the national recession, so must state government.
The same week in April that a delegation of government officials from beleaguered California came to Texas to examine the state’s sound economy, Republican Gov. Rick Perry announced deals with three major corporations, creating new jobs in the Lone Star State.
It’s no big secret why Texas has been attracting businesses, while corporations are fleeing California. As Perry told the Golden State visitors, Texas’ low taxes and regulatory sanity offer a friendly business climate for companies looking to set up shop.
These may be far from the best of times, but they are no longer the worst. Last year's annual "Best Cities for Jobs" list was by far the most dismal since we began compiling our rankings almost five years ago. Between 2009 and 2010, only 13 of 397 metropolitan areas experienced any growth at all. For this year's list, which measured job growth in the period between January 2010 and January 2011, most of the best-performing areas experienced actual employment increases -- even if they were modest.
For Forbes' list of the best cities for jobs, we ranked all 398 current metropolitan statistical areas, based on employment data from the Bureau of Labor Statistics reported from November 1999 to January 2011. Rankings are based on recent growth trends, mid-term growth and long-term growth and momentum. We also broke down rankings by size -- small, medium and large -- since regional economies differ markedly due to their scale.
Chief Executive magazine listed Texas the #1 state to do business after surveying 550 CEO's from across America.
"More than 500 CEOs considered a wide range of criteria, from taxation and regulation to workforce quality and living environment, in our annual ranking of the best states for business. The charts and articles in this special report and at http://www.chiefexecutive.net/states2011 show how each state fares on the factors most essential for a business-friendly environment—as well as what states are doing to attract and retain companies in the increasingly competitive battle to win site selection."
When a group of legislators proposed a trip to the state capitol of Texas to see what they do right that California does wrong, I first thought "I don't need to go because I'm a business owner and I know why businesses are leaving California -- we're over-regulated, we're taxed too much, and there's a constant war being waged against business and job creators."
But I decided to go -- at my own expense -- and in those three days, I heard first-hand testimony from political and business leaders in Texas and came away with great respect for their political leadership , something sorely missing here but something I hope to restore.
When our company recently expanded the number of its restaurants in Texas, I was startled to receive a call from Gov. Rick Perry thanking me for our decision.
In the 10 years I've been CEO of CKE Restaurants, no governor had ever made such a gesture. Perry went further during our conversation and asked what it would take to move our headquarters from California to Texas.