Recession?--Texas looking at huge surplus

Houston Chronicle:

The nation may be on the verge of a recession, but the Texas economy is doing well enough for Comptroller Susan Combs to predict Tuesday that the Legislature will have a $10.7 billion surplus when it convenes in January.

Much of the extra money can be attributed to record oil prices. While motorists are being socked with ever-increasing gasoline costs, oil and gas employment in Texas has been booming, the comptroller's office reported.

If Combs' early forecast holds up, Gov. Rick Perry would like to return part of the money to the taxpayers in the form of tax cuts or rebate checks, spokesman Robert Black said. But those steps would need legislative action.

Oil and gas employment in Texas grew by 7.5 percent between March 2007 and March 2008, leading an overall increase of 214,000 Texas jobs, comptroller's spokesman R.J. DeSilva said.

Consequently, sales tax revenue, a major source of state government income, also continues to grow.

And, DeSilva added, Texas has been insulated more than other states from the sub-prime mortgage lending crisis. Texas, he said, avoided the housing price bubbles that hurt states like California and Florida.

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"With a surplus of this magnitude, I know the governor believes we need to look at some sort of tax relief, whether it be on property taxes, business taxes or some type of actual rebate, like the federal government can do but we haven't been able to," Black said.

The last installment of school property tax cuts ordered by Perry and the Legislature in 2006 went into effect last year, but much of the savings already has been eroded by rising property values and appraisals.

An expanded business tax, enacted to help pay for the property tax reductions, is still untried and under fire. Companies had until May 15 to file their first reports under the new levy, and Combs recently extended that deadline by 30 days.

Perry floated the tax rebate idea in the 2007 session, but it went nowhere. It would require a constitutional amendment, including a two-thirds vote in both the House and the Senate plus approval by Texas voters.

Black acknowledged that there will be a need for increased spending on crucial needs, such as Medicaid and public education, including higher fuel costs for school buses, and the Legislature will have to balance those demands.

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What this demonstrates is that good things happen when you don't oppose oil and gas production. The US would also be better off is drilling were allowed in Alaska and in off shore site that are now restricted by Congress and the Democrats. The State of Florida has been ridiculous on this issue.

I hope the surplus is used to reduce property taxes.