AUSTIN -- Gov. Rick Perry and the state comptroller warned Wednesday that the national economic crisis is starting to seep into state government, but they said Texas is in a better position than most states to weather the storm.

Slower sales tax growth and other financial factors, including sagging public pension funds, are among the concerns that will be awaiting lawmakers when the Legislature convenes in January. Comptroller Susan Combs will tell legislators immediately before the session how much state money is available to spend.

"Our state will not go untouched," Combs said of the national recession as she presented online ways for the public and elected officials to better watch over government spending. "I don't think it's a mystery that sales tax revenue is down from a robust growth."

Two years ago, sales tax was growing at a rate of 12 percent, and now that has slowed to 5 percent, she said. The state has been helped by sales in the energy sector, but sales tax revenue is softening at some individual retail stores, Combs said.

Texas has been spared the housing downturn that hit some regions of the country, in part because home prices didn't skyrocket to "stratospheric" levels as they did in other states, Combs said. She said the number of home foreclosures in Texas is relatively low compared with those in places such as Nevada.

At a separate event Wednesday, Perry met privately with representatives of the auto, retail and restaurant trade associations to see how the economic crisis is affecting their industries. Before the meeting, Perry told news reporters that Texas has created a business-friendly environment and that it must keep working to create jobs and maintain its competitive edge in the difficult national economy.

Perry, who joined other governors in meeting with President-elect Barack Obama on Tuesday and praised Obama for reaching out to consider states' needs, said Texas is one of only nine states with a budget surplus.

However, only part of Texas' projected $11 billion surplus was uncommitted to spending, and now costs from Hurricane Ike and Medicaid enrollment growth are likely to take up that money.

Perry said budget constraints resulting from the economic slowdown could make it difficult to return surplus money to taxpayers, as he'd once hoped. But he said "it's a wise conversation to have for future legislators, future executives of the state -- to have a tool, if you have a surplus ... to be able to redistribute that back to the people."

He said he and some legislators were concerned that state general revenue could be needed to shore up public pension funds, such as the retired teachers' fund.

"It is important for us to keep our pension funds solvent," Perry said.

Perry said he was not worried that companies receiving money from his Texas Enterprise Fund would fail to keep their promises to create jobs in the state, though some of the firms are struggling amid the national financial crisis.

"I don't worry about enterprise fund companies because we have a very clear contract with them and a clawback provision," which requires a company to pay money back to the state if it doesn't create the promised number of jobs, Perry said. "It is one of the great success stories in this state, I would suggest."

Washington Mutual, an enterprise fund recipient that failed in September and was taken over by JPMorgan Chase, announced this week that it was cutting 9,200 jobs nationally. Details on the number of WaMu jobs to be cut in Texas are not yet available, company spokesman Greg Hassell said Wednesday.

The company has said it is keeping open its regional WaMu operations center in San Antonio that employs 1,800 people and is at the core of the state job-creation agreement. However, an undisclosed number of employees at that center are being laid off, Hassell said. He said the combined company intends to hire additional workers at the center in 2009.

So far, Washington Mutual has met its job-creation targets in Texas. Another progress report is due in January.

After Perry's meeting with business leaders, the Texas AFL-CIO issued a statement criticizing him for gathering with "the usual business and political elites" and ignoring workers.

"Governor Rick Perry's campaign to portray Texas as exceptional when it comes to a national economic crisis yet again displays how out of touch he is with the needs of working families in Texas," said Texas AFL-CIO President Becky Moeller.

Comments

(Requires free registration.)

0 comment(s) found!