Texas' Economy – Why Other States Should Be Watching Us

November, 2009

Representative Tan Parker

For several years, Texas has been the leader in job creation and economic development in the United States.  Despite the difficult economic challenges nationally, Texas continues to remain strong.  At the same time, I recognize the need to create new job opportunities for Texans that are suffering during this global recession.  As the Vice Chairman of the Technology, Economic Development and Workforce Committee, these are issues that are near and dear to my heart.

Our approach has been simple.  Through sound state budgets, low taxes, incentive programs and a favorable business climate, Texas has effectively created an environment that allows the business community to thrive economically and create job opportunities for hardworking Texans.

In Texas, we understand that government can not spend its way to a robust economy.  Only through cutting taxes and avoiding onerous regulations can we create the environment necessary for economic prosperity.  That is why our current state budget holds spending below the increase in our population and inflation combined and actually cuts general revenue spending.  Recognizing that most new jobs are created at the small business level, the Legislature also passed a massive tax cut for small businesses in Texas.

When Texas spends taxpayer money, we invest in our priorities.  Over half of our state budget is invested in educating tomorrow’s workforce, and this last session we increased funding for the Texas Enterprise Fund and the Emerging Technology Fund, Texas’s two proven job creation tools.  It is this low tax, responsible spending approach that has yielded Texas the following 2009 Taxpayer Foundation rankings:

  1. 7th most favorable business tax climate;
  2. The 3rd lowest state tax burden;
  3. The second lowest state debt to population ratio; and
  4. A per capita income average that is above the national average.

The results from our approach speak volumes.  As a state, we created more jobs in 2008 than all 49 other states combined.  More Fortune 500 companies call Texas home than any other state and Forbes magazine’s list of the top 5 cities in the United States for employment opportunities were all here in Texas.

Our economic success can not be rivaled, not even by the federal stimulus spending plan, which, as the Associated Press recently reported, is behind roughly 20 percent on the number of jobs promised to be created.  According to the Dallas Morning News, thus far the 10.7 billion stimulus dollars spent in Texas has netted only 19,500 jobs.  That is just one job for every $550,000 spent.  This is further proof that the government can’t buy jobs as efficiently as private businesses can create them.

Taxes and spending play such a vital part in a state’s ability to sustain economic activity.  Take for example, California.  Facing an estimated 26 billion dollar budget deficit, they have a 12 percent unemployment rate and are having to raise taxes.  In comparison, Texas, one of just a handful of states not facing a budget deficit, has just an 8.2 percent unemployment rate and is cutting taxes.

As a businessman, I travel all across the nation and I am often asked how Texas missed the bulk of this economic downturn.  Well, it is simple.  Low taxes, smart spending and letting the business community do what it does best, provide goods and services while creating jobs.  This is how we got here and, as a lawmaker, this is the tradition that I look forward to continuing long into our future.

As always, it is an honor to serve you in the Texas House of Representatives, and I welcome any questions or comments you may have on this or any other critical state issues.  Please feel free to call my capitol office at 512.463.0688 or call the district office at 972.724.8477.  You can also send me an email at tan.parker@house.state.tx.us.  Additionally, the first Saturday of every month I hold open office hours from 8 – 10am at my district office located at:

800 Parker Square, Suite 245

Flower Mound, Texas 75028