HillCo Partners: Texas State Economic Update

Texas’ economy extended its 18-month recovery in November according to the Dallas Fed’s Texas Business-Cycle Index, and the latest figures show that it continued to move at a steady pace in December. 

HillCo Partners closely monitors and compiles information concerning Texas’ current economic climate and trends, factors that paint an overall picture of the state’s economic health

Latest Market Information

The latest market information has been compiled from the December 2021 Texas Labour Market Information which includes some encouraging figures:

  • 5% unemployment rate (down from 6.9% in December 2020)
  • 13,059,600 people in non-farm employment
  • 694,400 job changes during the year
  • An annual growth rate of 5.6% 

According to the Federal Reserve Bank of Dallas, Texas’ employment rate expanded by 3.4% in December after growing rapidly in November at 7.9% as all sectors saw growth. Overall, Texas outperformed the U.S. in terms of national job growth, which stood at 4.5%. These figures suggest that continued economic expansion will be realized throughout the state, with particularly strong output expansion. 

State Sales Tax Revenue

The Texas Comptroller of Public Accounts monitors economic data in the state and publishes regular periodicals. 

At the beginning of February, Comptroller Glenn Hegar announced that state sales tax revenue totaled $3.9 billion in January 2021, representing an increase of more than 25% when compared to January 2021. Sales tax is the largest source of state funding for the state budget, accounting for 59 percent of all tax collections.

Most of this revenue is based on sales made in December, and this is remitted to the agency in January. “January state sales tax collections reached another all-time monthly high, with receipts from almost all major economic sectors rocketing above year-ago levels,” Hegar said. “Fueled by continued strength in both business and consumer spending, receipts from most sectors strongly surpassed pre-pandemic levels.

Hegar went on to add that business spending drove double-digit increases in receipts from the oil and gas mining, manufacturing, wholesale trade, and construction sectors. Only receipts from oil and gas mining remained below pre-pandemic levels. 

“Receipts from restaurants, a sector still depressed a year ago, were again up sharply and well above pre-pandemic levels.”

As of August 2021, Texas is top-rated (AAA) by all three major credit rating agencies – Moody’s, Fitch, and S&P. These agencies provide investors with assessments of the trustworthiness of potential state investments and any risks that might be involved. 

What is HillCo Partners? 

HillCo Partners is a full-service public and government affairs consulting firm. HillCo provides services in lobbying, public policy, communications, and regulatory affairs and focuses on positively impacting its clients’ agendas relating to local and state legislative affairs, tax, and regulatory matters. HillCo was founded in 1998 by Neal T. “Buddy” Jones and William J. Miller. Today, it is the top-rated Texas lobbying firm and has built a strong reputation through close relationships with clients that identify their specific governmental and business goals, and develop and implement targeted, fully integrated strategies.