Texas tax revenues have bounced back to levels nearly equal to pre-recession levels indicating that the economy is in recovery, the state’s chief revenue estimator said Wednesday.
John Heleman said taxes on retail sales, motor vehicles and oil production are near 2008 levels, the last year before the recession. Only natural gas taxes are lagging, mostly due to low prices, he said during a quarterly briefing to the state House Ways and Means committee.
“The sales tax collection in 2008 was our all-time high and then it went down in 2009,” Heleman told the committee. “It’s back up in 2011, and we’re essentially back to where we were in 2008 in terms of sales tax collections.”
The state’s Rainy Day Fund, which is financed with oil and gas revenues, is expected to reach roughly $7 billion by the next legislative session in 2013, Heleman added.
The tax revenues didn’t increase because the state raised taxes (it didn’t). They increased because economic activity stayed relatively strong and is coming back despite the continued weakness in the national economy.
The Texas economic story is real, and is not the result of being dealt “four aces.” Texas was still in transition from Democrat to Republican rule when Rick Perry became governor. Under Republican leadership, with a certain governor leading the way, Texas has kept the tax burden low, its housing market stable, the regulatory environment fair and dialed back the power of trial lawyers to get rich by attacking productive businesses.