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Rural Texas: A Snapshot

  • Defining rural is not a simple matter. Most people “know rural when they see it” but pinning down a single classification system that captures the precise differences between rural and urban areas appears impossible. Even the two federal agencies most involved in defining rural—the U.S. Census Bureau and the Office of Management and Budget—have trouble settling on any one definition. On top of that, each of those definitions are revised at least every 10 years with a new census.
  • There are 218 domestic federal funding programs available to Texas’ rural areas. Of these programs, 51 are either limited to rural areas or have some part of benefits directed at rural areas while 3 programs exclude rural and are limited to just urban areas. Each program has its own definition of rural and urban, many of which are based on population levels of 10,000 or fewer.
  • According to the U.S. Department of Agriculture (USDA), 196 of Texas 254 counties are rural and of these, 106 are located near one of the state’s 27 metro areas. Less than a quarter (58) of Texas’ counties can be considered urban. Almost the same number (57) of counties are completely rural—containing no town with a population of 2,500 or more—and the rest lie somewhere in between.
  • The biggest factor affecting rural growth is a county’s proximity or “adjacency” to a metro area. Adjacent rural counties contain more people on average and show a higher population growth than non-adjacent rural counties.
  • Between 1983 and 1993, nine Texas counties—about 6,900 square miles of the state—were reclassified as metropolitan, according to the USDA.

Rural Population

  • Rural population as a whole is growing, but its share of the state’s population compared to the cities, has dropped, simply because urban areas have grown faster. Texas’ non-metro population share fell from 18.9 percent to 15.4 percent between 1980 and 1999.
  • In recent years, the flow of Texans from non-metro to metro communities has slowed somewhat, at least compared to the 1980s. In the 1990s so far (1990-99), the non-metro population growth rate has doubled, jumping to 9.5 percent, while the metro growth rate of 19.2 percent remains below the prior decade’s.
  • In the 1990s, 70 rural Texas counties lost population. The biggest losses occurred in those rural counties that are economically dependent on farming or oil and gas and have no nearby metropolitan area.
  • According to a report by the USDA’s Economic Research Service (ERS), nearly three-fourths of the nation’s non-metro counties rose in population from 1990 to 1997, while only half did so in the 1980s. Most of that growth stemmed from persons moving into rural areas rather than new births.
  • According to the USDA, between 1995 and 1997 net movement into rural areas was highest for the early career ages (26-30) and college graduates were well-represented, unlike in earlier decades, when rural “brain drain” was the result of a large share of college graduates moving to the nation’s cities.

Age

  • On average, rural Texas counties have a bigger share of older citizens than their city counterparts. Rural Texas accounted for a sixth of the state’s population, but was home to one quarter of Texans over 65. The concentration of elderly Texans is greatest—22 percent—in the “most rural” counties.
  • This situation, however, is changing. In metro counties, the over-65 population rose more than the total metro population in the 1990s. By contrast, the growth rate over the period for the rural over-65 population was less than half the total rural population growth rate of 9 percent.

Rural Employment and Unemployment

  • Employment growth has followed the same general pattern as population—overall, adjacent counties create jobs faster than non-adjacent ones, but metro areas lead both by a comfortable margin.
  • Between 1970 and 1998, urban employment levels jumped by almost 149 percent, while rural employment increased by 58 percent. Thirty-eight of the state’s 196 rural counties actually lost jobs over this period.
  • Rural services related to recreation, retirement and such natural amenities as mountains, lakes, shorelines, etc. have emerged as important new sources of rural employment and growth and advances in telecommunications are enabling still other types of services—telemarketing, data processing—to move to rural areas.
  • According to the USDA, while farming remains important as a source of employment in many rural areas, it is no longer the dominant rural industry, nor is it likely to be so again. Today, the largest share of rural jobs and employment growth comes from various non-agricultural services.
  • Agricultural services, farm, oil and gas, and government sectors all account for higher shares of employment in rural areas than in the cities. The only sector to lose jobs in Texas from 1970 to 1997 was farming.
  • Rural Texas suffers from higher unemployment rates than do the state’s metro areas. In 1999, metro unemployment rates reached their lowest point in a decade, dropping more than 40 percent from a high rate of 7.6 percent in 1992 to 4.4 percent. Over the same period, rural unemployment remained higher and showed a smaller drop, going from a high rate of 8.4 to 5.9 percent.

Rural Income and Poverty

  • Rural Texans generally have lower incomes than their urban counterparts. In 1998, the state’s average per capita income was $25,369; rural Texans had an average income of only $18,938 per person, versus $26,555 for metro residents.
  • In 1995, Texas’ statewide poverty rate was 16.7 percent. The rate averaged more than 20 percent in the state’s rural counties versus less than 16 percent in urban counties.
  • According to the USDA, the nation’s working poor are more likely to live in rural areas than urban areas; about 30 percent of the poor who are full-time, full-year workers live in rural areas.

Rural Dividing Lines

  • Differences in climate, topography, rainfall, and natural resources all affect county demographics and economics. Among Texas’ rural counties, location in a particular region–north, south, east or west—can mean as much to their economic prospects as adjacency to metro areas.
  • The eastern half of Texas is by far the most metropolitan section of the state. This part of the state is seeing fewer rural counties as the urbanized areas expand outward.
  • In contrast, the western half of Texas is predominantly rural. Only 14 of the 147 counties located west of Interstate 35 are considered urban.
  • Northeast Texas is the most metropolitan region of the state. Of the 47 rural counties in the region only 11 are not adjacent to a metro area. In the region, only four counties are farming-dependent and three are mining-dependent. Between 1970 and 1999, the rural population of this region increased 50 percent and employment increased by 91 percent, the most of any region in the state.
  • Northwest Texas is the most rural region. Half of Texas’ rural counties are located in this region, which is the most dependent of the regions on agriculture and oil and gas. Forty-eight of the 65 farming-dependent counties in the state are located in this region and it has the lowest population and employment growth of all of the regions. However, the region had the highest average per capita income level and lowest unemployment rate in the state.
  • The Southwest—comprised of 36 counties—is Texas’ fastest-growing region in population. It’s also the poorest of the state’s regions. Ten counties in this region are farming-dependent and seven are mining-dependent. About three-fourths of the Southwest’s rural counties are persistent–poverty counties. The Southwest region has the second-highest employment growth among regions, but also the lowest per-capita income and highest unemployment.
  • The Southeast region is the least rural of Texas’ four regions with just 16 rural counties, two of which are not adjacent to a metro area. Three counties are considered farming-dependent; one is mining-dependent. Within the region, population rose by 22 percent between 1970 and 1999, while rural employment rose by nearly 54 percent. In all, the Southeast seems best off economically among the four regions.

Agriculture, Oil & Gas Markets

  • Two industries that have served as the linchpins of rural Texas—oil and gas production and agriculture—have witnessed massive changes and now require fewer workers.
  • The worldwide markets in which oil, gas and agricultural commodities are traded can make any local economy that depends on them move up and down like a roller-coaster.
  • Oil prices have bounced all over the board over the last three decades, with average monthly wellhead prices moving from $6 per barrel in 1974 to more than $34 in 1981, down to almost $9 in 1986, back up to nearly $31 in 1990, back down to $8 by the end of 1998, and up to almost $30 in 2000.
  • Natural gas cost about $1 per thousand cubic feet (Mcf) in December 1998, but tripled to more than $3 in August 1999. By late November, prices were down to $1.99, a 33 percent drop. Then, in just a year, gas prices skyrocketed to an unbelievable $10.50 per Mcf in December 2000—a more than 500 percent increase!
  • Agricultural prices are subject to unpredictable and uncontrollable events—the development of more cropland in other countries, drought, flood, insect plagues, and hurricanes. In a world market, events on the other side of the globe can affect farmers in Texas.

Agriculture

  • Agriculture dominates many areas of Texas. According to the Texas Agricultural Extension Service, of the 168 million acres of land within Texas’ borders, 131.5 million—nearly 78 percent—are used to produce agricultural products that were worth $14.6 billion in 1999.
  • In Texas’ 65 farming-dependent counties between 1970 and 1998, farm employment dropped by nearly 33 percent, while total employment rose 15.7 percent.
  • The decline of farming employment is, in many ways, a consequence of success. Improvements in technology, crop science and farm management have all boosted output while reducing the need for labor.
  • USDA defines farming-dependent counties as non-metro counties in which farming contributed a weighted annual average of 20 percent or more of total labor and proprietor income from 1987 to 1989. Sixty-five Texas counties—one-third of all rural counties—are farming dependent.
  • While more land is now being farmed in Texas on more farms, the actual size of farms and number of full-time farms has decreased.
  • In Texas, agriculture accounts for nearly 13 percent of the jobs in rural counties.
  • More than 145 counties in the state rely on farming for 10 percent or more of their employment base and it accounts for more than one-fourth of all employment in 33 rural Texas counties.
  • About 176,000 Texas farm and ranch workers are self-employed according to the Texas Agricultural Statistics Service (TASS) and an estimated 24,000 of the total are unpaid family members. In all, TASS reported 247,000 Texans worked 15 hours or more on farms and ranches in the state in October 1998.
  • Texas is a leader in the production of many crops and livestock commodities, however the state lags behind other states in some food processing sectors, including those in which Texas raises the greatest amount of raw materials.
  • The Texas farmer is worse off today than he was 28 years ago because the buying power of his income has dropped by 40 percent.

Oil & Gas

  • According to the USDA, mining-dependent counties are those where mining contributed a weighted annual average of 15 percent or more of total labor and proprietor income. Thirty rural Texas counties are mining dependent.
  • In 1998, the state’s rural counties accounted for just 13 percent of all Texas jobs, but nearly 23 percent of jobs in mining (virtually all of them in oil and gas production).
  • The mining sector’s growth rate, second-lowest for all industries in rural counties, reflects the oil and gas industry’s downsizing and streamlining efforts after the mid-1980s bust. Therefore, two of rural Texas’ mainstay industries—farming and mining— which combined to make up 16.2 percent of total rural Texas employment in 1998, have provided little or no employment growth over the last three decades.
  • For the 30 Texas mining-dependant counties, oil production has fallen from a high of 462.7 million barrels in 1972 to only 167.2 million barrels in 1999, a 64 percent decline. Twenty-five of the counties have seen their oil production drop since 1972, some almost disappearing, with one-fourth seeing their county oil production fall by more than 80 percent.
  • In December 1997, 162,400 people were employed in the oil and gas extraction industry in Texas, compared to the peak of 313,700 in January 1982, when it represented 5 percent of total Texas employment. By May 1999, that total was down to 135,400 jobs, a decline of more than 17 percent from the end of 1997, representing less than 1.5 percent of all the jobs in the state.
  • Although Texas leads the nation in its number of producing oil wells, only 6 percent of these produce oil and gas on their own, without enhanced recovery techniques. In the early years of Texas’ fields, by contrast, half or more of their wells flowed without artificial lift.
  • Texas’ production of 536 million barrels of crude oil in 1997 was the state’s lowest since records began in 1947, when Texas produced more than 900 million barrels.
  • In Texas, both the number of producing wells and the average daily production from those wells is on the decline. Since the price crash in 1998, nearly 15,000 wells have stopped pumping.
  • A key reason given for decreased oil and gas production is that the technology is not available to get some of the oil and gas out of the ground. It is estimated that 50 to 75 percent of the available oil and gas can’t be reached.
  • Natural gas has surpassed crude oil in both production and value for many major domestic producers.
  • The 30 rural mining-dependant counties represent about 30 percent of Texas natural gas production. Overall, this group of counties has seen a 45 percent drop in natural gas production between 1972 and 1999.

Rural Economic Development

  • Despite tough times faced in the mainstay industries—oil and gas production and agriculture—many rural Texas communities have flourished due to the emergence of new industries and creative approaches to economic development.
  • Industries have developed naturally in areas where rural Texas has a particular advantage. Among them: recreation, retirement havens, tourism, hunting and fishing, birding, and prisons.
  • Texas has a competitive edge over some other rural states when it comes to attracting new business—that is no corporate or personal income tax. Of the states surveyed by the Comptroller’s office, only two others—New Mexico and Washington—are similar. As a matter of fact, Texas ranks almost last—48th and 49th respectively—in state tax collections per capita and per $1,000 of personal income.
  • The tool that generates the most money for economic development in Texas rural areas is the local sales tax, which can be used for various means of economic development by any city that votes to collect it. In 1999, this tax brought in total revenues of almost $241 million to cities throughout the state.
  • Of the 1,194 incorporated cities in Texas, 196 have passed the local sales tax under 4A, from which revenues can be used for economic development; and 323 have passed 4B, from which revenues can be used for city quality of life improvements. Of these, 94 of the towns with a 4A local sales tax, and 141 with a 4B tax, are in rural counties.