Report: Oil price slump costs Texas 65,000 energy jobs — and 250,000 overall
AUSTIN — Declining oil prices have slowed the sprinting Texas economy to a very deliberate walk, according to a report issued Tuesday.
This year, the state will increase total jobs by 1 percent, says the analysis by the business-backed Texas Taxpayers and Research Association.
But that’s a lot fewer than Texas has been creating.
For the past eight years, recession notwithstanding, Texas has posted average job growth of 2 percent a year.
That compares with just 0.5 percent a year growth nationally, says the association’s new report, “Miracle on Ice? What Low Oil Prices Mean for Texas.”
“The ‘Texas Miracle,’ as our state’s nation-leading economic engine has been dubbed, is currently on ice,” said the group’s president, Dale Craymer, who wrote the report.
“Much of Texas’ growth has been fueled by oil and gas, and the recent price drop has taken its toll,” he said. “Texas is no longer the nation’s most robust job creator. Although the state continues to add jobs, for the first time in 12 years our job engine has been lagging the rest of the nation.”
Craymer’s case, by the numbers:
· The loss of 65,000 oil and gas jobs has so far cost the overall Texas economy roughly 250,000 jobs.
· The loss of more than 600 rigs equates to a drop in Texas investment of more than $40 billion.
· Texas itself is part of the reason for the oversupply of oil on the market and the corresponding price drop.
· Unlike in many previous “busts,” Texas state finances remain sound today for several reasons. Last year, lawmakers left $4.2 billion of general-purpose state revenue unspent in their two-year budget, Craymer noted. And the state’s “rainy day fund” holds about $10 billion. In the 1980s oil bust, state budget writers didn’t enjoy such cushions, he said. Also, although the diversification of the state economy has been overstated, because of a 1992 change in a federal industry-classification system, Craymer said lawmakers in the late 1980s and thereafter made the state revenue system less reliant on energy-production severance taxes. They raised taxes on sales, fuel and business, he explained.