10 Principles for Texas
in the 21st Century
- Develop a better-educated workforce
- Direct more of every education dollar into the classroom
- Raise the bar on student performance
- Cut taxes in Texas
- Introduce competition into Texas government
- Improve government performance and accountability
- Reduce the size of government
- Bring common sense to regulations
- Use technology to cut costs and increase quality
- Return control to communities and individuals
My office collected $1.32 billion in sales tax revenue in January 2004, a remarkably robust 5.9 percent increase compared with January 2003. We are now experiencing the highest fiscal year-to-date sales tax growth rate since July 2001. The state’s 2004 fiscal year began on September 1, 2003; sales tax revenue is up 5.0 percent compared with the same five months in fiscal 2003.
When I sent the cities and counties their sales tax allocations last November, I promised that “This year, the Grinch isn’t going to steal Christmas.” And that was exactly right. Like Dr. Seuss’ How the Grinch Stole Christmas, “It started in low. Then it started to grow.” This turnaround indeed “started in low.” We hit a low point last summer, when July collections shrank 4.6 percent compared with the same month of the previous year. But in August, the decline was only 0.5 percent. However, in September, sales tax collections “started to grow,” by 2.1 percent. They grew by 3.6 percent in October, by 4.3 percent in November, 8.7 percent in December and another 5.9 percent in January.
The economic expansion driving these gains is finally on track.
Already, several current measures of economic activity, in addition to sales tax collections, have begun to recover—such as the rig count and total non-farm employment in the state. The unemployment rate also is coming down. Last May, the unemployment rate hit a high of 6.8 percent. By December 2003, the last month for which we have data, it had eased some to 6.4 percent. My projection is that it will continue to fall slowly, so that the average unemployment rate during fiscal year 2005, which begins next September, will have slipped below the 6 percent mark.
Texas’ real gross state product grew by 2.7 percent in fiscal 2003, better than the 1.9 percent growth rate of 2002. For the 2004-05 fiscal biennium, I anticipate a 4.0 percent average annual growth rate, with 2005 expected to grow a little faster than this fiscal year. Our gross product growth will again surpass that of the U.S. by fiscal 2005.
And nine of the ten leading indicators, such as the Texas Stock Index, housing construction and new business incorporations, are pointing toward an economy that is gaining momentum.
Carole Keeton Strayhorn