Evidence abounds that Texas’ economic resurgence is well underway. Last month, we learned that the state’s labor market returned to its pre-recession employment levels; Texas’ unemployment rate tracked below the national average for the 60th consecutive month; and sales tax revenues, the state’s main tax generator and a key indicator of consumer demand, grew for the 22nd consecutive month.
But just what exactly is fueling the Lone Star State’s recovery? That’s the question Fiscal Policy Director Talmadge Heflin set out to answer recently in a Daily Caller article.
The answer, Heflin explains, is actually quite simple-Texas’ elected officials, compelled by voters, have embraced a philosophy of limited government and free markets, perhaps more so than any other state in the nation, and the private sector is reaping the rewards. And that’s more than just rhetoric too.
Last session, state lawmakers closed a $15 billion budget shortfall without raising taxes, opting instead to cut spending to match available revenue. This meant that for the first time in 50-plus years total state spending actually decreased.
The Lone Star State has also been a leader in lawsuit reform since the mid-1990s. Through a series of legislative proposals and constitutional amendments – including non-economic damage caps in medical malpractice lawsuits and last year’s “loser pays” legislation – Texas has acted decisively to reduce the number of frivolous lawsuits filed in the state.
And in the decade since Texas deregulated its electricity market, companies have invested $41 billion in new generation and transmission capacity. This has allowed Texas’ electricity supply to keep pace with our state’s rapid growth, and for retail electricity rates to be lower today than they were in the final days of Texas’ utility monopolies.
In nearly every major policy area, the state has adopted a conservative stance that has gotten government out of the way, creating a dynamic business environment to which people, capital, and ideas are flowing. And the state’s economy is prospering because of it.
-James Quintero