Governor discusses Tex. economyDallas Business Journal - by W. Scott Bailey

The current state of the national economy has left its fiscal and political scars on people and places across the United States.

But in Texas, Gov. Rick Perry says the Lone Star State has managed to absorb the one-two punch of a national economic crisis and a devastating hurricane — Ike, which rolled through Texas in early September.

Perry was sworn in as the 47th governor in December 2000. Achieving economic success, he says, has not been easy.

In early 2003, Perry says Texas lawmakers were dealing with an unexpected $10 billion budget shortfall. And that’s when he says state leaders knew they had to make some tough financial decisions.

“We lowered taxes, we prioritized spending and we focused on the essentials,” Perry says.

He says that effort helped build the foundation for the economic stability Texas has enjoyed at a time when other states are struggling with the fallout from the economic meltdown.

“Today, we’re the number-one exporting state in the nation,” Perry says. “And we are now the home to more Fortune 500 companies than any other state in the nation. That’s a powerful statement.”

Perry points to what happened in 2003 as a game-changer for Texas.

“That’s when we really sent a powerful message to the people who risk capital, create jobs and create wealth that we were not going to be like other states,” he says.

Eyes wide open
Perry has his share of critics. Some of them question why Texas still leads the nation with the highest percentage of uninsured. Roughly one in four Texans lack health insurance.

And Texas has not been entirely immune to the national economic woes. Early this year, D’Ann Petersen, an economist with the Federal Reserve Bank of Dallas, raised some red flags when she warned that Texas’ housing industry was in for a tough 2008.

A Federal Reserve report published earlier this month suggests Texas experienced a September slowdown affecting retailers, the auto industry and real estate leasing activity.

In recent days, Perry has called upon state agencies in Texas to take measures to cut as much discretionary spending from their budgets as possible. He has also pledged to push for more budgetary transparency.

Texas Comptroller Susan Combs says the Lone Star State took in nearly $1.7 billion in sales tax revenues last month — a nearly 4 percent increase over September 2007 collections.

“While growth remains positive overall, sectors such as construction, retail trade and restaurants are showing signs of slowing down,” Combs says.

Some suggest Texas may need to tread more cautiously in the days ahead.

“We continue to be somewhat exempt in Texas from the national problems — especially in San Antonio,” says Bill Ozer, vice president of San Antonio-based NAI REOC Partners. “But we need to be careful in the investments we make moving forward. We can’t grow blindly.”

Says Perry, “The fact of the matter is that there are some concerns. But we shouldn’t bury our heads in the sand. We shouldn’t go hide in the closet and wait for the financial bogey man to go away.”

Still standing
Perry believes Texas leaders have already taken some proactive steps, which have helped to shield the state from some of the economic storm surge that has hit other parts of the country.

One example was Texas’ decision to enact stronger guidelines for home-equity borrowing and lending. Perry says that has resulted in Texas having one of the lowest levels of mortgage defaults among the nation’s top 10 most populous states.