Spotlight on the Non-Recovery in Texas; Heads Still Buried In The Sand

Here are a pair of articles about the recovery in Texas that simply did not happen. Please consider New data, new story on jobs.

For much of 2009, Central Texas business leaders hung their hats on reports that showed, even in a recession, Austin was still adding jobs. Turns out there was a problem with those positive reports: They were wrong. Revised figures show Austin lost more in '09, and numbers began to decline earlier than thought. The revised data also show that Texas as a whole had a tougher job market last year than thought. The state lost 354,000 jobs in 2009, which is 78,000 more than the 276,000 previously estimated, according to the updated data. The commission and its counterparts around the country revise their job data each year based on newly available information from employers' tax records that show how many people were on payrolls. The monthly numbers are estimates, based on surveys from employers. The California Employment Development Department on March 1 reported the state had lost 292,000 more jobs in 2009 than officials had thought; the new estimate is 871,000 jobs cut, compared with the earlier estimate of 579,000. Oregon reported losing 28,000 more jobs in 2009 than previously estimated.

Texas cannot escape budget shortfall It goes to figure when unemployment is soaring, tax revenues will drop off. And so they did. Please consider Officials: State cannot escape budget shortfall.

The Texas economy seems to have turned a corner, but the improvement will not be enough for the state to avoid a significant shortfall in the next budget, state officials said Monday. Sales tax collections are slowly picking up as more jobs are added in Texas, said John Heleman , the Texas comptroller's chief revenue estimator. In February, the state's sales tax collections were down 8.8 percent compared with the same month a year earlier. Though still in the red, the February figure looked better than the previous months' double-digit decreases that have put the state 13 percent behind last year's collections six months into the budget year. "One month certainly doesn't make a trend, but it is encouraging to see that we are beginning to move in the right direction," said Heleman, who added that he expects to see sales tax growth starting this summer. The state's sales tax revenue collection is a key indicator of Texas' fiscal health because that money fills more than half of the state's general revenue fund, which pays for expenses such as education, health care and prisons. Even so, the state's budget shortfall is expected to be about $11 billion at a minimum and could reach as high as $15 billion, John O'Brien, the executive director of the Legislative Budget Board, told the House Appropriations Committee.

Heads In The Sand It is pretty amazing when you can put a positive spin on horrendous data like this: "In February, the state's sales tax collections were down 8.8 percent compared with the same month a year earlier. Though still in the red, the February figure looked better than the previous months' double-digit decreases that have put the state 13 percent behind last year's collections six months into the budget year." Good Grief. Nationally, retail sales for February 2009 were completely shell-shocking horrendous, and December 2009, and January 2010 figures were revised lower. Please see Please consider Stimulus About To Wither On Vine; A look At February Retail Sales for details. Texas could not even beat remarkably easy year over year comparisons, at least judging from national sales numbers. Regardless, there should be no conceivable way to spin that data positive, yet John Heleman, the Texas comptroller's chief revenue estimator, managed to do just that. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com