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July 2008

MAY REVENUE (in millions): SALES TAX: $1,778.6 OIL PRODUCTION: $158.1 NATURAL GAS: $256.5
MOTOR FUELS: $264.6 MOTOR VEHICLE SALES: $270.7 TOBACCO: $137.2


Texas Tops the Nation for Business, says CNBC

America's Top State for Business

Texas is the nation’s top state for business and boasts the best all-around economy in the U.S., according to a CNBC study that measured 40 different factors of competitiveness.

In the last 12 months, more than half of the job gains among all U.S. states were in Texas, accounting for more than 73 percent of entire job gains for all states from June 2007 to July 2008. Over the last 5 years, the state has added more than 1.3 million net new jobs to our economy. That’s more than the next top nine states in the country.

“We promote strong economic growth in Texas and have developed strong programs that allow businesses to grow and prosper,” says Comptroller Susan Combs. “Our state’s business- friendly climate, superior colleges and universities, leadership in innovation and technology, and the growth of our work force initiatives continue to make Texas a great place to live and do business.”

CNBC ranked Texas No. 1 in transportation, business friendliness, cost of living and quality of life – key factors that attract and retain businesses and skilled workers.

Gateways to
the Globe

by Karen Hudgins

Panama Canal expansion puts Texas ports at the world’s door.

From Houston to Corpus Christi, Texas seaports are expanding in anticipation of a massive increase in cargo traffic.

In fall 2007, work began on a $5.6 billion expansion of the Panama Canal that will essentially double its capacity with a new lane of traffic, longer and wider locks, and deeper channels. When completed in 2014, the canal will accommodate ships carrying up to 10,000 twenty-foot equivalent units, or TEUs. One TEU is equal to a 20-foot section of a standard marine shipping container and is the standard unit for measuring cargo.

Photo Coutesy of the Port of Houston Authority

“About 12 to 13 percent of containers that come to us come through the Panama Canal,” says Jim Edmonds, chairman of the Port of Houston Authority (PHA). “When they widen those locks and deepen the channels and go from a 5,100 TEU ship to a 10,000 TEU, it will be a real godsend for us.”

John Martin, president of Pennsylvania-based Martin Associates, which provides economic analysis to seaports, agrees.

“The canal will allow larger ships to come in, posing a significant opportunity for the Port of Houston and for all container ports in Texas, including Galveston and Corpus Christi,” he says.

Docked Ship

Port of Corpus Christi

Port of Corpus Christi Top Trading Countries by Total Trade – 2006

1 Venezuela, 2 Nigeria, 3 Mexico, 4 Russia, 5 Jamaica, 6 United Kingdom, 7 Kuwait, 8 Saudi Arabia, 9 Algeria, 10 Colombia. Source: Port of Corpus Christi.

Terminal Velocity

At the Port of Corpus Christi, work is progressing on its $400 million planned La Quinta Trade Gateway Container Terminal.

“The La Quinta plan ties in perfectly with the timing of the Panama Canal expansion,” says John Valls, marketing manager for the Port of Corpus Christi Authority. “La Quinta is positioned to capture the growing container cargo volumes that will be coming into the Gulf ports as a result of the Panama Canal expansion.”

During its initial year of operation, La Quinta will handle 30,300 containers and generate 608 direct and indirect jobs, $35 million of business revenue and $32 million of personal wages, salaries and consumption purchases. By its 20th year, or at full build-out, the terminal is projected to handle 703,800 containers annually.

In Houston, PHA officials in 2007 opened the first berth and about 65 acres of the planned 1,043-acre Bayport Container Terminal. When complete, the $1.4 billion container and cruise terminals will have a capacity of about 2.3 million TEUs and will be built out in phases to meet market demand. After five years of operation, the terminal is projected to generate more than 9,800 jobs and $35.6 million in state and local taxes.

Bayport opened another 50 acres of container yard this year, Edmonds says.

“My expectation would be that we’ll build out Bayport about as fast as we can build it,” he says. “There will be enough pressure from our customer base to build it.”

Award-Winning Port

In 2008, PHA received the President’s E Star Award for export service in recognition of its continuing support of export growth in the U.S. business community for at least five years. PHA was among four U.S. organizations this year to receive the prestigious honor.

The award reflects the port’s export growth. From 2002 to 2006, the Houston port experienced year-over-year export trade growth between 4 percent and 9 percent. Brazil was among its leading export trading partners in 2006 with 2.024 million short tons. (A short ton is 2,000 pounds.) Exports to Belgium totaled $2.36 billion in U.S. dollars in 2006.

“It’s a compliment to Texas and to producers as well as to the port,” Edmonds says. “For the first time ever, the Port of Houston is slightly tilted for more exports than imports. We’re now 60/40 exports to imports. There is more and more Texas product being shipped abroad, partly because of the [weak] dollar and partly because of needs around the world.”

Major trading partners shipping containers in and out of Houston are based in northern and southern Europe, the Mediterranean, Mexico and Latin America and western Africa. In recent years, growing portions of Houston’s containerized cargo have moved to and from China and East Asia.

Leading the Nation

Three Texas ports are among the top 10 U.S. ports that move cargo.

U.S. Port Cargo Rankings 2006

Port/StateTons
South Louisiana, LA225,489,499
Houston, TX222,146,750
New York/New Jersey157,630,099
Long Beach, CA84,393,795
Beaumont, TX79,485,704
Corpus Christi, TX77,557,478
Huntington, Tristate
(WV, OH, KY)
77,157,809
New Orleans, LA76,901,327
Los Angeles, CA65,978,238
Mobile, AL59,832,197

Source: U.S. Army Corps of Engineers

La Quinta Kick-Off

In June, Port of Corpus Christi officials were evaluating proposals from firms to develop and operate the La Quinta terminal.

La Quinta’s planners conceived the project 10 years ago as a solution to the problem of growing congestion affecting traditional international gateways for containerized cargo.

Since then, the Port of Corpus Christi has purchased 1,100 acres on Corpus Christi Bay and has completed engineering and environmental studies of the site.

This work allowed the Port to obtain permits for dredging and extending the ship channel just over 2 miles to the project site from the U.S. Army Corps of Engineers and other regulatory agencies. The new federal Water Resources Development Act would allot an estimated $30 million toward building the 1.5-mile extension to connect La Quinta with the Corpus Christi Ship Channel. While Congress passed the legislation, it has not yet appropriated the funds, Valls says.

By increasing the amount of cargo moving through the port, La Quinta will have a positive economic effect on the entire region, says Valls.

“The job growth is going to be phenomenal, from truck drivers to pilots to line handlers to stevedores,” he says. “You’re going to have associated industrial parks and warehouses, and they all have to be serviced. You’ll probably have hotels pop up and restaurants.”

A Martin Associates study estimates that by its 20th year of operation, La Quinta will generate nearly 15,000 jobs with $785.7 million in personal earnings and about $70.7 million in annual state and local taxes.

Texas’ existing transportation infrastructure and readily available land position the state to command a leading role in meeting the increasing demands of global commerce.

“We’ve got a lot of growth opportunity here,” says Edmonds. FN

Port of Houston Trading Partners 2007 - Photo courtesy of Port of Houston Authority

Leading Trading Partners
by Combined Tonnage

Country Combined import and
export by tonnage
Mexico 29,103,008
Venezuela 10,644,711
Saudi Arabia 8,489,250
Algeria 6,237,307
China 5,682,822

Leading Trading Partners
by Dollar Value

Country Combined import and
export by value
Mexico$12,222,292,226
Venezuela$5,850,562,714
China$5,763,474,339
Germany$5,536,554,234
Brazil$5,181,763,756

Source: Port of Houston Authority

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