Got Business? Houston Does — Here’s Why!
The Houston metropolitan area ranked fourth in the nation for overall population growth between 2006 and 2007, according to new census data released last month. The increase is attributed to our job market and booming economy.
We have full-occupancy in our Class A office space, and we have experienced the #1 job-growth rate in the country (U.S. Bureau of Labor Statistics) due to the opportunities available in our expanding market.
Barton Smith, a University of Houston economist, said about two-thirds of Houston growth is from migration from other states.
“That only happens when the economy is doing substantially better than other places,” Smith said. “Houston’s economy is going to continue to outperform the national economy in a significant way, so when unemployment starts to creep up in other parts of the country, many people are going to leave Michigan and Ohio and Florida and look for jobs here.”
Many Texas cities enjoy a strong economy and low unemployment and as a result Gov. Rick Perry announced March 10 that an estimated 370,000 Texas businesses will be getting a tax cut of $90 million.
“I believe in truth-in-budgeting: when government levies a tax and collects more money than is needed, we must either stop collecting the tax, return the money or both,” said Perry in a press release. “Thanks to our healthy economy and low unemployment rate last year, the state collected more money for the unemployment trust fund than we need, which is why I’m directing the state to bring that tax to a screeching halt for this year.”
In 2007, Texas created more jobs than any other state in the nation, resulting in record-low unemployment. Texas economy is strong for a reason. Lower taxes and friendly policies lure business. “Houston is probably the state’s biggest economic hot spot thanks to its sheer size and broad-based growth and booming energy industry,” says senior economist Rakesh Shankar in his Texas economic forecast through 2008 for Moody’s Economy.com.
Case in point, The Wall Street Journal recently wrote a comparative analysis piece examining the differences between the economic vitality of Texas and Ohio. In this editorial, the authors discuss the approach each state takes with regard to their economic policies and how policymaking impacts the business climate and overall economic health of a state.
This article points to the fact that Texas has gained 36,000 manufacturing jobs since 2004, while 200,000 manufacturing jobs have left Ohio since 2000. Many of the businesses that have left Ohio are simply relocating to more business-friendly states, like Texas. In fact, Houston is the #1 manufacturing employer in the nation!
The editorial cites several reasons to explain why Texas’ economy continues to grow while the economies in Ohio and some of its neighboring states are becoming more unstable. One reason is the affordable cost of living in Texas. Unlike Ohio, which has one of the highest personal income tax rates in the country, Texas has no personal income tax. Also, Texas is a right-to-work state, whereas unions still heavily control a number of industries in Ohio.
“If we are to continue to prosper, we must preserve our business-friendly climate in Texas. This means we must keep taxes low, maintain a reasonable regulatory climate, and promote and reward free enterprise,” says Republican Texas State Representative Ken Paxton.
This kind of thinking has long been part of the Texas mantra. So I feel it apropos to finish this Houston’s Got Business post with a June 14, 1916 quote in New York Times article, “Houston Tax Plan Brings Prosperity.” The article quoted J. J. Pastoriza, then Tax and Finance Commissioner of Houston:
“Never tax anything which is produced by the industry, enterprise, or ingenuity of man, because to do so will tend to decrease the sum and increase the cost of such products. The fewer restrictions, both as to taxes and regulation, which a city places upon business or products, the faster, greater, and wealthier will that city grow. The power to tax is the power to destroy as well as the power to build up. Houston decided to use this power to construct and build a great city, rather than to retard or destroy one.”