THE POLITICAL elements,

Texas State and Local Government Sandra Gieseler

Chapter 1: The Structure of the Lone Star State… ……………………………………… 1 Chapter 2: Texas Higher Law – The Constitution in Perspective …………………. 33 Chapter 3: Groups and Special Interests in Texas …………………………………….. 55 Chapter 4: Voting and Elections in Texas ………………………………………………… 81 Chapter 5: Political Parties in Government and State Politics ……………………. 111 Chapter 6: The Texas Legislature …………………………………………………………. 137 Chapter 7: The Texas Governor, Executive and Bureaucracy …………………… 179 Chapter 8: The Law and State Courts ……………………………………………………. 217 Chapter 9: Local Governments in Texas ………………………………………………… 243 Chapter 10: Taxes, Education and Roads – All Together Now, or Never? ……. 271

Chapter 1 The  Structure  of  the  Lone  Star  State…

The economy of a social system is a broad, somewhat permanent reflection of the crossroads of people, geography and culture – thus it is part of the structure of the social system. Economic  aspects  of  any  society  are  huge  “building  blocks”  of   political relevance as well, because they convey much about that the government will respond to, be shaped by, and will decide.   It’s   not   to   say   that   any   government   can   precisely manage an economy, or economic conditions, for that matter. However, one hallmark of American economic superiority has

always been the responsiveness and adaptability by government, to accommodate and encourage growth. What that means varies from era to era, and it should be no surprise to anyone that our state and national economies have drastically changed in the past two decades. Think of economies as you would populations – a teeming stew of individual abilities, diversities, and tendencies – acting in the aggregate.   That’s   how   sociology,   political   science, and of course, how economics works to define, illustrate and conclude (even though  often  after  the  “fact”  in  historical  terms).  Regardless,  all  governments  have  a  role   in economic possibilities, and outcomes, often to the tune of the survivability and true sovereignty of the place itself. Texas’  story  is  an  exceptionally  good  example  of  the  links  between  government  and   economy, in fact, one might view a study of Texas as a microcosm of America itself: the vast, diverse acreage and resources within; great wealth and great poverty; the human spirit of individualism, opportunity, and buck-wheat toughness. And in a cultural sense, all reflected in the trends of policy and politics. At the onset of this chapter, and the following nine chapters, we will preview the essential elements feature – a simple block presenting the finite concepts – the essence – of each subtopic/institution/process. This is not an outline, but a tool that should assist you in organizing and retaining specifics about the chapter. Think of the essence as the core, the simplest denomination of the broader topic.

Genesis: The Land and Economy Economic considerations stem from the natural characteristics of the place itself – the   land   mass,   water,   climate,   soil,   and   treasures   below.   All   are   the   “movers   and   shakers”  of  any  society,  because  such  are   things  people   fight  over,  grow   rich  or  poor   from, travel vast distances to obtain and subsequently place the results at the foot of government. In other words, the demands and challenges for those in government are the result of the important economic factors which people are most concerned and affected by – and economic factors always revolve around the concept of scarcity.

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Economic factors are the core elements of economic production and consumption – land (including buildings/homes), labor (employment) and capital (finance, machines, equipment). These elements are in demand, but there is never enough for everyone, everywhere, at any time. One may view the concept of demand as greed, but that’s   not   how   economies   work   – there are markets, which accommodate demand. Thus, government, especially political government, is the broker for these vital and unstoppable exchanges. Typically, political governments determine, in the famous aphorism  of  political  scientist  Harold  Lasswell,  “who  gets  what,  when,  where  and  why”.   Explaining how this happens will require the rest of this book. We will start first with that comes first  naturally,  the  economic  staples  from  the  state’s  vast  territory. Traditionally  the  state’s  economic  vitality  revolved  around  one  product,  an  economic   staple, which is usually predetermined by the availability of the item, and the demand for it (this is known as natural advantage). If that product – wheat, cattle, steel, etc – sold profitably, the state or region experienced economic prosperity. Conversely, economic hardship was unavoidable when the production and marketability of that product was diminished or changed entirely. Cotton was the product that drove southerners into the rich soils of East Texas. Endless   rows  of   cotton  plants   pumped  money   into   the   state’s   economy  until   the  Civil   War brought the industry to an eventual halt. Although cotton would continue to reap profit in Texas, the postwar economy would soon be bolstered an ever-increasing demand for beef – especially in the commercially viable North and mid-Atlantic markets. This presents economic diversity for those involved with the choices – what to use the land, labor and capital to produce, and which crop presents the best terms of trade. Texas’  natural  advantage  – vast acreage and a ready supply of feed proved a worthy drawing card for the post Civil War economy. The cattle industry would become the state’s  mainstay  crop  as  millions  of  longhorn  were  driven  to  Midwestern  stockyards.  The   culture of this industry, of course, became permanently marketable as well – cowboys, trail rides, risk; reward would only draw more of the same. Another crop – crude oil – would also present economic diversity and another wave of adventurers. Interestingly, the overall potential for wealth, based on the terms of trade, continued to rise in Texas. What set Texas apart from other states, however, is that the commercial production was based solely on natural advantages, as opposed to comparative advantages evident in industrial regions.

“Texas  Oil”

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At   the   century’s   turn,   the   discovery   of   Spindletop   in   East   Texas   diverted   the   economic  elites  and  adventurers  to  a  new  “frontier”  of  possibility  in  oil  and  natural  gas.   The  extraction,  refinery  and  marketing  of  these  ready  staples  dominated  Texas’  modern economy,   until   the   oil   bust   of   the   1980’s.   The   challenge   continues   at   present,   with   choices again presenting themselves. At the start of 2008, Texas was the leading producer of wind-generated  energy…more  on  that  topic  later  in  this  chapter. Since the   bust   of   oil   production   in   the   early   1980’s,   Texas   has   become   a   highly   diversified economy. The economic factors of land, labor, and capital have been successfully adapted to the expansion of other markets, i.e., the transition from one primary economic mainstay to production many other different goods and services. What creates this comparative advantage? Typically, several aspects of a state or other definable region will prove beneficial to business and industry. These factors include a dynamic list headed by low taxes, viable infrastructure (roads, rail, ports, etc), availability of labor/workforce, office and warehouse space, and of course – financial capital to accommodate growth. Simply, producers have options and incentives here. The essentials of this chapter describe the changed economic landscape, and provide new insights about the evolving economy – the so-called New Economy -, which revolves around trends in high technology, digital innovation, and the benefits of research-driven competitive advantage.

Natural Advantage: Texas

Before   the   oil   crisis   of   the   early   1980’s,   Texans   could   proudly  boast  that  the  state’s  oil  industry  contained  30%  of   nations  oil  reserves,  produced  30%  of  the  nation’s  domestic   oil supply, comprised 28% of the nation’s   refineries   and   employed close to 400,000 people. All this generated 6.7 billion in salaries, and accounted for 28% of the states revenues (from severance taxes only). The disposable income generated by oil & gas employment helped all sectors of the economy, including finance, construction, manufacturing, retail sales and services. Million of dollars contributed   from  major   oil   companies   to   the   state’s   public   and private universities helped to fund petroleum-related business and scientific academic programs.

The  euphoric  economic  highs  of  the  70’s  and  early  80’s  came  to  a  grinding  halt  when   Texans saw the price of crude oil drop drastically and dangerously low in the mid 1980’s.  Even  more  frustrating  was  the  realization  that  the  self-sufficient Texas oil baron now had to confront the powerful currents of globalization. The oil industry by the late 1980’s  had  become  part  of  a  fully  integrated  international  market,  controlled  largely  by  a   cartel called the Organization of Petroleum Exporting Countries (OPEC). Thirteen member nations comprise OPEC, including eights Arab countries, as well as Asian, African and Latin American nations. Despite extreme pressure from the U.S. and other importing nations, OPEC decided to drastically cut the per-barrel cost of crude oil. In the

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early  1980’s,  the  price  of  crude  was  at  an  all-time high of 51.02 per barrel, up from the 24.28  price  during  the  1979  Iranian  Revolution.  However,  OPEC’s  creative  slicing  drove   the price down to $16.51 per barrel in 1986. A slight recovery was experienced in 1991, only to see the price fall to $11.90 in 1994. The entire state economy was vise-gripped   by   the   drastic   slide   in   oil   prices.   “The   Texas economy lost nearly 300,000 jobs in Natural resources and manufacturing between 1981 and 1987, with most of this loss occurring in the oil and gas industry. In 1986   alone,   80,000   nonagricultural   jobs   were   lost.”   Within   a   six-month period, unemployment went from single to double digits. The Gulf Coast area was extremely hard-hit by the depressed  oil  market.  “In  1982,  the  oil  industry  provided  one  if  five  of  all   jobs  in  the  Gulf  Coast.  In  1987,  it  accounted  for  only  one  in  seven.” Of course the depressed oil industry caused an adverse domino effect in every sector  of   the  state’s  economy. Many unemployed workers defaulted on mortgage and personal loans. Retail business suffered due to lack of demand. The construction industry declined as the number of new housing starts dropped drastically. Insight Question: What is the difference between the economic problems caused by oil prices in the eighties, and problems facing Texas residents in the mid- 2000s?

Energy in Transition In 1999, crude oil prices bottomed out at just above $12 per barrel. At the same time, the US economy was soaring, due to massive changes in international trade, relative peace, and Internet-based   “e-commerce”,   resulting   in   the   term   “New   Economy”.   All economic trends place demand on state and local government to respond, either to insulate   the   negative   impact,   or   to   “accentuate   the   positive”   So,   in   March   1999,   the   Texas Legislature moved to assist oil operations by repealing the severance tax on oil and gas, providing incentive for producers to reap profits. What a difference a few years would make! The Bush Administration ushered in a made-to-order climate for energy as an economic priority, which grew increasingly prone to international political forces after the terror attacks in 2001, the invasion of Iraq in 2003, and the emergence of alliances between major oil producers Iran and Venezuela. Texas has obviously benefited from the vast amount of federal spending in support of the war in Iraq, but the effect on the oil & gas sector itself has not been significant, especially in terms of production. In fact, the mining sector overall has declined in state production, between 2000 and 2006 (see Table 1.1) Employment in this area has fluctuated, but remains lower than 1998 in numbers of jobs. Regardless of the smaller role crude oil and refining plays in the state economy, Texas still leads all states in petroleum reserves and potential sources of renewable

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energy.   In   fact,   “Texas  crude  oil   reserves represent almost one-fourth of total U.S. oil reserves, and Texas natural gas reserves account for almost three-tenths of total U.S. natural  gas  reserves.”  Additionally,  Texas  crude  oil,  concentrated  in  the  Permian  Basin   of west Texas, continues to serve as the benchmark grade of domestic oil production, due  to  its’  “light  consistency  and  low-sulfur content, the quality of WTI is considered to be high, and it yields a large fraction of gasoline when refined. The natural gas sub-sector continues to dominate the US market, also supplying around 25% of annual demand. With humble beginnings as a waste by-product of crude oil drilling, natural gas would eventually be distributed through converted oil pipelines, and  now   laces  across   the  US.  Today,   “an  expansive network of interstate natural gas pipelines extends from Texas, reaching consumption markets from coast to coast, including those in California, the Midwest, the East Coast, and New England. Texas has 10 natural gas market hubs located in both East and West Texas, more than any other State.”

“Texas  Panhandle  Natural  Gas  Irrigation  Pump”

In addition to oil & natural  gas,  Texas’  natural  advantages  include  large  deposits  of   bituminous and lignite coal. Given the technological progress on clean burning coal as an   alternative   energy   source,   the   state   could   find   another   “black   gold”.   If   the   state’s   private and public leaders pursue this potential market along with (ironically enough, Vice-President   Dick   Cheney’s   home   state)   Wyoming   which   leads   the   nation   in   coal   production. It remains unclear how Texas will fare as a producer of alternative and renewable energy. For the student of this subject it’s   important   to   marry   up   the   economic concepts of natural, comparative and competitive advantage, within the context of this text – that is, how politics in many ways does dictate economic reality. We will review the potential for alternative & renewable energy in the Emerging & High   Technology   section   of   this   chapter,   for   now   let’s   continue   to   profile   natural   – advantage – what exists in surplus, and in large quantities – as   in   the  state’s   longest   running staple: agriculture.

Table 1.1

Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Agriculture 6.47 6.39 7.46 8.09 9.79 8.47 8.35 8.53 8.67 8.7 8.74 Mining 45.18 44.07 39.22 57.92 68.98 97.72 100.73 110 113.45 114.04 114.29 (Oil and Gas) Construction 36.88 40.26 41.87 43.47 45.08 51.59 57.85 62.86 66.23 69.35 75.27 Manufacturing 92.98 92.27 94.46 93.16 118.84 127.44 139.79 148.09 154.91 161.38 168.85

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Total Goods 181.51 183 183.01 202.64 242.69 285.21 306.72 329.48 343.26 353.46 367.15 (Current Dollars) Wholesale 53.79 54.5 54 55.05 60 65.65 70.75 71.67 77.03 81.82 85.41 Retail 51.74 54.66 57.24 58.63 59.61 63.34 67.26 70.43 75.18 79.93 83.39 Transportation 50.25 51.63 53.48 57.07 60.21 63.51 67.86 71.67 77.11 81.12 85.59 and Utilties Information 35.86 36.99 36.53 36.04 38.81 40.27 42.52 44.72 47.36 49.11 50.8 Financial 117.2 125.93 128.22 133.44 139.75 145.28 160.1 170.68 180 191.32 204.13 Activities Professional and 73.21 82.2 83.94 88.72 95.56 105.83 117.21 127.37 137.91 150.71 163.61 Business Services Educational and 42.36 46.8 51.38 54.76 59.04 63.17 67.22 70.68 75.31 80.26 85.27 Health Services Leisure and 23.11 23.99 25.49 26.48 27.71 29.32 31.96 34.02 36.34 38.73 40.98 Hospitality Other Services 17.6 18.11 18.68 19.64 19.91 20.7 21.99 22.99 24 25.39 27.02 Government 80.59 84.45 91.51 96.33 101.1 107.06 112.95 117.92 124.23 128.91 135.9 Total Services 545.71 579.25 600.47 626.17 661.71 704.13 760 805.19 854.47 907.3 962.08 (Current Dollars) Total Gross Product 727.23 745.33 760.59 770.98 808.09 831.79 867.86 896.51 923.78 951.27 983.93 (CY2000 Dollars) Total Gross Product 727.23 762.25 783.48 828.81 904.41 989.34 1066.71 1134.67 1197.73 1260.77 1329.23 (Current Dollars)

Agribusiness Agribusiness, i.e., agriculture based on science, technology and economics, is still a major  player   in  Texas’   economy.  Again,   the  natural  advantage  of  enormous  acreage,   climate (growing season, soil) and access to unlimited markets has kept Texas at or near the top of numerous crop productivity levels. Although the growth patterns are shifting, Texas still leads the nation in cotton production, cash receipts from livestock, and total number of farms and ranches. In 2005, the state was second only to California

in total receipts, 16,355 million dollars, up from 13, 621 in  2002.  Texas’  agronomic  advantage  is  reflected  in  the   success of livestock production, while the comparative advantage presents itself in other crops. The state Comptrollers  “Rural  Texas in  Transition”  report  explains   how   a   “landscape   as   vast   and   varied   as   Texas’   supports a variety of agricultural production. The largest source of agricultural revenue in Texas comes from the sale of beef cattle. Texas produces about 20% of the nation’s beef cattle and ranks #1 in the country in the value of cattle raised. Other important livestock products include broilers (young chickens) and

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dairy products, followed by chicken eggs and hogs. Sheep and lambs and turkeys are also commercially raised in Texas. Texas raises more sheep and produces more mohair from angora goats than any other state. The   Panhandle   produces   the  majority   of   the   state’s   wheat   corn,   cotton   and   beef.   Texas’  top  four  agricultural  counties  in  terms  of  sales  – Castro, Deaf Smith, Parmer, and Erath counties – are home to major livestock operations. The poultry industry is concentrated primarily in east Texas. The Lufkin-Nacogdoches area supplies the vast majority  of  the  state’s  commercial  timber.  San  Angelo  is  the  center  for  Texas’  goat  and   sheep industry, while the Killeen-Temple-Waco  (Stephenville)  is  the  state’s  largest milk producer.  Coastal  Texas  is  the  state’s  rice  bowl,  while  South  Texas  is  the  citrus  capital   and largest vegetable producer. Despite  the  variety  of  crops,  cotton  is  still  king  in  Texas.  “Since  1880,  Texas  has  led   all states in cotton production in most years, and today the annual Texas cotton harvest amounts to approximately a third of total production in the U.S. The annual cotton crop has  averaged  3.81  million  bales  since  1983.” Cotton is Texas’ most valuable crop, generating 9% of the state’s total agricultural receipts and 29% of the nation’s cotton revenues. In fact, the state named cotton their official state fiber/fabric in 1997. Other important crops in this category are greenhouse and nursery products, corn for grain, hay (#3 among the states), and wheat. Texas is a leading (#3) producer of greenhouse and nursery products (flowers, ornamental shrubs, young trees). Other major field crops in Texas are sorghum grain (#2 among the states), peanuts, rice (#5 among the states), and cane for sugar. The leading fruits produced in Texas are watermelons, grapefruits (official state fruit) and cantaloupes. Important Texas vegetables include onions (official state vegetable), potatoes, and cabbages. Texas is the #1 producer of cabbages among the states. The economic impact of agriculture in Texas is vast, and often overlooked in its overall reach. That is, its web of related industry and of course, employment potential. Consider   that   “one   in   five   Texans   works   in   some   form   of   agriculture. Agricultural commodities   add   about   $14   billion   to   the   states’   economy,   making   agriculture   the   second largest industry. For every dollar spent on agricultural commodities, more than three dollars are pumped into other sectors of the economy – generating $45 billion a year. 16 Additionally, agricultural research and development at Texas A & M University, along with its partnership Agricultural Extension Service program represents the cutting edge of progress and increased productivity – factors which are vital to this highly competitive industry. The competitiveness of agriculture has also been affected by the shifting landscape of free market forces and even greater changes in international trade and shifting labor markets. Two emerging trends need to be emphasized at the time of this writing, midway through 2007. The first is the confounded issue of immigration reform, which

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will likely remain unresolved for the next several years. The second is alternative fuel production which often is referred to as simply ethanol. What is so interesting about the topic is that, especially in Texas, ethanol-based  gasoline   isn’t  an   “oil  &  gas”   issue  as   much as an agricultural one. Consider the following report, issued by the USDA Economic Research Service:

Expansion of the U.S. ethanol sector has large and far-reaching effects throughout the agricultural sector. The corn market is affected directly by the increase in ethanol production. Corn used to produce ethanol rises rapidly over the next several years and is expected to reach 4 billion bushels annually by 2010/11. Other crops are affected as movements in relative prices trigger supply and demand adjustments. Effects are also seen in the livestock sector due to higher costs of feeding animals. And all of these changes have implications for farm income and retail food prices. Most of the adjustments in agriculture occur over the next several years, during the largest expected increase in ethanol production.

“Myth:  Corn  Ethanol  is  Great”

Direct Effects for Corn

As the ethanol industry absorbs a larger share of the corn crop, higher prices for corn will intensify demand competition among domestic industries and foreign buyers of feed grains. USDA’s  2007   long-term projections show average corn prices reaching $3.75 a bushel in the 2009/10 marketing year and then declining to $3.30 by 2016/17 as the ethanol expansion slows. Livestock Production Reduced

Higher   corn   prices   affect   the   livestock   sector   because   of   corn’s   importance   as   an   animal feed. In response to higher corn prices, red meat production declines and growth in poultry output slows in the United States, particularly during the next several years as ethanol production ramps up. Higher corn prices reduce the profitability of meat production, although the greater availability of distillers grains from dry-mill ethanol production  partly  offsets   this  effect…with   reduced  production,  prices   for  meats at both the producer and retail level rise, and per capita consumption declines.

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Agribusiness and related industries will always represent the nature of Texas, literally and figuratively, because the present and future trends will continue to reward this sector. Regardless of the challenges facing agribusiness – climate extremes, shifts in the labor market, and food safety – Texas is positioned to minimize the dangers and continue to maximize potential. The traditional economy has influenced responsive government and public-private partnerships that will keep the state in its position as a national and international leader in agriculture.

A Diversified Economy – The Comparative Advantage in Transition Throughout   the   1990’s,   Texas’   economic   potential continued to expand, by growth driven largely   by   the   state’s   rapidly   increasing   population. The North American Free Trade Agreement (Nafta) also shaped the changing economy. As Texas lost manufacturing jobs, the export/import sector, retail and wholesale trade increased, as finished goods move across borders. The same dynamic, along with population growth, and a high performing national economy set the stage for an explosion of service and service-related business. This section will detail how the changing nature of our economic demands and international political economy have required changes in measuring and classifying services. The following feature is an excerpt from the Federal Reserve Bank in Dallas, which provides a succinct look at the status  of  Texas’  robust  service  sectors:

While agriculture and goods industries remain vital to the state’s economic health, the service sector today accounts for roughly 80 percent of jobs and 63 percent of output (Chart 1). Texas matches the U.S. in the share of employment in services. The state’s share of output in services is less than the nation’s 70 percent because of Texas’ importance as an energy producer and growing role in manufacturing. Measured by employment or output, services are expanding faster in Texas than in the U.S. (Chart 2). The sector has emerged as the state’s leading engine of job creation. Since 1990, it has added more than 2.4 million jobs on net and more than doubled the pace of employment growth in goods-producing industries. For Texas as well as the U.S., the increasing importance of services reflects a long-term evolution, driven by the capacity of free enterprise economies to reinvent themselves. Agriculture’s dominance faded with the rise of manufacturing, and today the factory era has given way to services. The transition shows the ability of businesses and workers to adapt to ever-changing circumstances, including rapid technological progress and an increasingly competitive world economy.

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Sizing up Services Truckers making deliveries, technicians maintaining Internet sites, brokers selling insurance, architects designing shopping centers, managers running businesses, nurses caring for patients, waiters serving diners – all these and many others are service jobs. To make sense of this sprawling sector, government agencies aggregate services into groups of related businesses. In 2003, they adopted the North American Industry Classification System (NAICS) to replace the Standard Industrial Classification (SIC). An important reason for the transition to NAICS was rapid growth in service industries that weren’t well defined under SIC codes. The NAICS information category, for example, includes communications, publishing and the online services that have emerged in the information-based economy. Under NAICS, the service sector’s diverse members are grouped into seven private- industry categories and government. Texas’ share of employment in each of them is at or below the nations – with one notable exception. The state has 24.3 percent of its total employment in trade, transportation and utilities, compared with 22.9 percent for the U.S. as a whole. From 1990 through 2006 – a period that includes vigorous expansion, recession and recovery – each of Texas’ major service categories outperformed its U.S. counterpart in job growth (Chart 3).

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Transportation Services This category owes its importance to Texas’ strategic location on the Mexican border and in the center of the U.S. These attributes have spurred expansion of transportation networks, which have attracted firms in such industries as retail and wholesale trade, airlines, trucking, pipelines, rail and cargo transportation, and warehousing – all of which add to employment in this large sector. Among the major transportation firms headquartered in Texas are Southwest Airlines, American Airlines, Continental Airlines and Burlington Northern Santa Fe Corp. The Port of Houston is the country’s second-busiest deepwater facility, and Dallas/Fort Worth International Airport ranks sixth in the world for passenger traffic and 27th in the world for cargo volume. Houston’s Bush Intercontinental Airport is the nation’s ninth busiest in passenger traffic. Fort Worth’s Alliance Airport, a purely industrial airport, is one of the country’s largest intermodal facilities.

“Dallas/Fort  Worth  International  Airport  – Texas”

Professional and Business Services

The state’s second-largest service category, with almost 15 percent of Texas jobs, is the top performer in job growth. Professional and business services include many knowledge-based positions in law, accounting, architecture, engineering, software design, management and consulting. The industry has added 655,900 jobs since 1990

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– an average annual pace of 5.7 percent, more than a percentage point faster than the nation. Professional and business services have played an important role in the state’s current expansion. Since the recovery began in July 2003, the industry has added over 228,000 jobs on net – more than any other – accounting for roughly 28 percent of the state’s private job gains. Employment has risen sharply for many professional services related to energy and construction, including architectural and engineering services and management, professional and scientific consulting. Employment in computer systems design has also been raising at a fast clip, likely the result of firms outsourcing software development.

Education and Health Services The second-fastest-growing service category includes private university and education workers, training center employees, doctors, nurses, medical technicians and social workers. It has added 571,900 jobs since 1990. Health care dominates the category, with about 1.1 million jobs, or 88 percent of the total and roughly 12 percent of Texas private employment. Health care demand is rising nationwide as the population ages and new technology changes the delivery of medical services. In Texas, the rapidly growing population is another driver for health care employment. The second-most-populous state, Texas has been adding residents twice as fast as the nation, in part because of migration. Along the Texas – Mexico border, health care-related jobs have been multiplying as many Mexicans cross the Rio Grande to meet their medical needs. A key factor in the category’s growth has been the rise of ambulatory care – more commonly known as outpatient services. Managed care and new medical technologies helped reduce the average hospital stay nationally from 7.6 days in 1980 to 5.6 days in 2004. Visits to outpatient facilities have climbed. In Texas, employment in ambulatory care has increased a vibrant 8 percent a year on average since 1990, and the segment now makes up more than 50 percent of total health care jobs. Employment has also been steadily increasing at hospitals and nursing homes. As the Texas population grows and ages along with the baby boom generation, demand will continue for workers in these service areas.

Leisure and Hospitality Service Employment Increases Texas boasts a wide range of attractions – the Alamo, Galveston and Padre islands, Space Center Houston, Big Bend National Park, the Fort Worth Stockyards, the State Capitol and the rolling Hill Country, to name just a few. Add in business travel and entertainment, and it makes for a healthy industry. The leisure and hospitality category – which includes hotels, eating and drinking establishments, and recreation services – makes up 11.4 percent of Texas’ economy and employs about as many workers as the state’s factories.

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Most leisure and hospitality industries have been adding jobs at a steady pace each year. Since 1990, job growth has averaged 3.8 percent, outpacing the nation’s 2.7 percent. The lion’s share of leisure and hospitality employment is concentrated in food-service and drinking establishments, which make up almost 80 percent of the total. This segment continues to add workers at a moderate pace, though job growth has slowed from the 1990s’ pace. Clearly,   Texas’   economic   transformation   owes   much   to   the   unprecedented   population  growth  in  the  1990’s.  It  is  obvious  that  the  sheer  volume  of  people,  and their characteristics (especially age) have directly impacted the Education & Health sector. We will look at this perspective, known as demographics, later in this chapter, as it is impossible to understand economics without looking at the consumer and labor component.  For  now,   let’s   finish   the  discussion  of  economic  production,  by  examining   the other sectors of goods – construction and manufacturing, along with the fascinating emerging market sector – high-technology – which represents a nexus of both goods and services.

The Construction Industry

Economists often look at the activity in the construction industry to gauge the state of the entire economy. A depressed housing and commercial trend indicates a slow, sluggish economy as individuals and businesses alike are reluctant to invest in expansion activities. The Texas construction industry came to a near standstill during the oil crunch  years,  and  the  national  recession  dips  of  the  mid  80’s   and  early  90’s.  Jump  started  by  lower  interest  rates  and  rapid population growth, 1992 figures finally indicated a pattern of

steady  recovery  with  a  “22  percent   increase   in  housing  starts  at  an  annualized  rate  of   70,000 houses in the first few months of 1993, residential permits were up another 15 percent for early  1993.” In   fact,   “construction   of   large   projects   took   off   in   2006,   including   office   buildings,   condominiums, hospitals, hotels, schools and entertainment venues. Nonresidential contract values jumped 52 percent in 2006, their strongest growth since 1981 (see Chart  3).  Unlike  the  1980’s  when  growth-driven construction often led to overblown and unmanageable  lending,  Texas’  “most  recent  building  boom  took  a  quiet  backseat  to  the   house-price boom that occurred elsewhere in the country. While concerns grew that home prices along the coasts were soaring beyond fundamentals, inflation-adjusted median sales prices in Texas were relatively unchanged .As a result, some people were left   with   the   impression   that   construction   in   the   state   also   hadn’t   accelerated…that

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wasn’t  the  case. Anecdotal reports suggest job growth could have been stronger with a more  educated  workforce.”

Manufactures Keep Pace

Following  an  extremely  dismal  future  in  the  early  1990’s,  manufacturing  in  Texas  has   made a remarkable recovery. Between 1991 and 2001, over 84,000 new manufacturing jobs were added in Texas, making it the fourth largest employment sector. By 2006, in fact, the manufacturing sector continued to out-perform the national average, adding 26,300 factory jobs, an increase of roughly 3%. Not surprisingly, manufacturing jobs have  continued  to  increase  similar  to  the  state’s  overall  growth,  around  the  metropolitan suburbs.  Consider  that  “a  third  of  the  state’s  manufacturing  jobs  are  in  North  Texas  – 22 percent in the Dallas area and 11 percent in the Fort Worth area. Houston and its environs account for 24 percent. Austin and nearby Round Rock are at 6 percent, San Antonio at 5 percent. Border counties have a below-average share of manufacturing jobs, most likely because of the proximity of less expensive production in Mexico. Only 14 Texas counties   report   no  manufacturing   at   all.   The   state’s   metropolitan areas differ in their industrial profiles. Dallas leads in primary metals, furniture, wood, paper, printing, food, textiles and nonmetallic mineral products, such as brick, glass and cement. Houston has  half  of  the  state’s  petroleum  and  chemicals  manufacturing jobs and roughly a third of the workers making fabricated metals, machinery and electrical equipment. Houston also leads the state in jobs for workers making beverages, with 27 percent. San Antonio has the next largest concentration – 16 percent. Houston and Dallas are each home to slightly more than 20 percent of workers making   rubber   and   plastics   products.   While   Austin   is   one   of   the   nation’s   high-tech capitals,   Dallas   has   Texas’   largest   concentration   of   workers   making   computer   and   electronics products,   with   43   percent   of   the   state’s   employment.   Austin   employs   26   percent of these workers. Fort Worth–Arlington leads the state in rolling out transportation equipment, with 36 percent of jobs. Dallas also is home to a good number of factory jobs making  transportation  equipment,  with  21  percent.”

“Made  in  America;;  A  Whitney  Texas  Manufacturing  Company  Show”

Insight Question: What does this statistical information have to do with state government?  Aren’t  the  results  achieved  by  the  businesses  and  laborers alone? The answer is subtle but constant – government at all levels contributes to overall conditions affecting economic growth and employment. Sometimes that means new jobs and opportunities; otherwise it can mean job losses and shrinking sectors. Two

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trends  of  the  1990’s  have  been  greatly  assisted  or  shaped  by  governments  – free trade agreements and technological advancements. Texas manufacturing has benefited from both  trends.  Consider  that  “international  exports  underlie  and  increasing  share of Texas manufacturing   activity,   and   exports   more   than   doubled   during   the   1990’s…Over   the   next decade, Texas exports will more than double again, reaching $200 billion in 2008. The Internet has allowed even the smallest businesses to expand their customer base, their hours and their geographic market. The outlook for manufacturing is good overall, and it is very telling of current and future   trends   in   the   state’s   economic   expansion.   In   the   next   two   sections   we   will   examine two other aspects of economic   growth   that   virtually   guarantee   the   state’s   vaunted position in production and exports. Emerging technologies (often called high- tech) and Industry Clustering are the engines of a competitive advantage, fueling growth in jobs and productivity, as well as inviting educational advancements, research % development,  etc.  The  state  government’s  role  is  an  absolute  must  in  creating  the  best   conditions  achievable…and  Texas  is  no  “slouch”  in  this  regard!

21st Century Trends

If  you  are  reading  this  book,  chances  are  you’re  a  college  student  – taking a course actually   required   by   an   act   of   the   Texas   Legislature.   It’s   no   doubt   as   a   student   or   anyone considering continuing education, the prospect of a challenging, well-paying career in some sort of technology-savvy field is alluring (and well advertised!). Culturally, we are very interested in anything technologically advanced – for function, achievement,  or  glamour  for  that  matter!  Economically  and  academically,   let’s  first  sort out this topic by considering what IS high-tech, and where does it fit in across Texas? What types of jobs and employers are most invested? It is a fascinating subject from an academic standpoint, and one that involves government at every level. It’s   important   to   remind   the   student   and   observer   that   high-technology is not an economic sector itself, although it is possible to identify industries that produce primarily high-tech outputs. Previously, the definition of these industries was conservative, thus, calculating the number of new jobs, and tracking the performance of high-tech was unrealistically low. Fortunately, the Texas Legislature (with much encouragement from Texas Governor Rick Perry and other state leaders) approved the Emerging Technology Fund in 2005. This fund allocated close to 400 million dollars, for a variety of goals, and provided a more comprehensive framework and definition for high-tech development. Specifically, HB (House Bill) 1765 defines the scope of emerging tech as:

1. expediting innovation and commercialization of research; 2. attracting, creating, or expanding private sector entities that will promote a 3. substantial increase in high-quality jobs; and 4. increasing higher education applied technology research capabilities;

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And the legislation defines emerging technologies as:

1. semiconductors; 2. information; 3. computer and software technology; 4. energy; 5. manufactured energy systems; 6. micro-electromechanical systems; 7. nanotechnology; 8. biotechnology; 9. medicine; 10. life sciences; 11. petroleum refining and chemical processes; 12. aerospace; 13. defense, and 14. other pursuits, as determined by the governor in consultation with the lieutenant

governor and the speaker of the house of representatives. The legislation is unique in several ways, which also help explain how trends in Texas’  politics  benefits  economic  opportunity.  First,  the  fund  illustrates  the  concentration   of  economic  planning  in  the  Governors’  Office,  a  goal  that  Rick  Perry  quickly   inherited   after assuming the governorship in 2001. Next, note item 14, from the list above – that “other  pursuits,  as  determined”  – may qualify for funding from the ETF. This is indeed a wide  mandate  for  the  state’s  Chief  Executive  to  interpret.  In  chapter  9  of  the  text,  Gov.   Perry’s   inroads to trade relations and other commerce will be featured. For now, the best we can note about the Emerging Tech Fund is the significant emphasis on education and its partner – research & development. Specifically, the ETF is administered by the   Governor’s   Office,   the   Workforce   Commission (TWC), the Education Agency (TEA) and the Higher Education Coordinating  Board.   For  much   of   the   1990’s   and   into   the   current   decade,   a   constant   concern in attracting high-tech development has been a shortfall in the labor market – a situation true of the US overall. Of course, markets such as Austin and Dallas have been magnets for research & development and churning out qualified graduates into the labor pool; overall, however, Texas education system has lagged in this regard. The Emerging Tech Fund includes specific goals to encourage innovation by allocating fund as   “for incentives for private or nonprofit entities to collaborate with public or private institutions of higher education in this state on emerging technology projects with a demonstrable economic benefit to this state.” Interestingly, an analysis of the ETF shows the distinction between it and the older Texas Enterprise Fund which authorized close to $300 million for stated goals such as the governor’s   “deal-closing   fund”   (200   million),   a   provision   to   retain   Austin’s   International Sematech research consortium (40 million), and the balance for endowments to university technology & biotechnology research. The Enterprise Fund was approved and implemented in 2003, a year when the Texas Legislature found itself

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facing a 10 billion dollar budget deficit, which resulted in serious cuts to most public school employees both secondary and higher, and to the state government employees as well. Regardless of definitions, high-tech obviously is not a typical economic sector, but one  which   infuses  other  sectors’  productivity   – much like telephones and combustible engines infused earlier economies. The high-tech   industry,   much   like   the   “new   economy”   itself, suffers in comparison as it tends to be regarded through the applications and measurements of the old economy. High-tech is the wild card of the new economy – it greatly enhances productivity, quality measurement, and changes estimates of profit, wealth and investment.

High Tech Industry and Emerging Technology The  Progressive  Policy  Institutes’  comprehensive  “Technology   and  New  Economy  Project”  contributes  very  useful  suggestions   and insight for state government to pursue. The following excerpt details eight key steps to development strategies in the New Economy, useful to government, students, and families. The report also touches on a related aspect of economic health – state budgets – always an item of great concern in Texas. Keep  in  mind  that  the  state’s  budget  has  undergone  wild  swings   from a record $10 billion budget deficit in 2003, to a surplus of approximately 4 billion in 2007. Spending wisely is the challenge for any government budget effort, to avoid the harmful effects of budget deficits.

Consider   that   “some   of   these   shortfalls   result   from   the economic slowdown, but sates  are  poorly  positioned  to  respond.  In  spite  of  the  good  times  of  the  1990’s,  virtually   all sates ignored the advice of any sage financial planner to save for the future and instead focused their efforts on cutting taxes and expanding  spending…collectively,   if   states  are   to  grow   their   revenues,   there’s  only  one  way   to  do   it:  grow   the   incomes  of   their  residents,  who  will  then  pay  more  in  taxes.”

Economic Development Strategies for the New Economy –

Spring 2002 Focus On The Quality, Not Just The Quantity Of Jobs: For most states, the central focus of economic development should shift from adding new jobs to boosting incomes and creating better jobs for all of the state’s residents…to do this, states should replace, or at least supplement, the chief metric success used today – job creation – with a new one: income growth. Know Your State’s Function In The Global Economy: A state should develop an in-depth and ongoing understanding of its economy, including how the major economic sectors work and what these economic strengths and weaknesses are. Too often

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decision makers think they already know what’s going on (e.g., “everyone knows that we are strong in venture capital”) and skip this essential stage in the eagerness to “get on with it.” But this is a critical mistake. States should also not be afraid to take off the rose-colored glasses and examine their strengths and weaknesses, opportunities and threats. Too often states confuse economic development strategies with marketing documents, wanting to put forward their best face. But the best strategy is an honest one. Marketing the state’s strengths can come later. But there is another key step. After analysis, a state must organize to help translate its knowledge into action, at both the private and public sector levels. Get Smart About Business Incentives: While most states have added New Economy economic development policies in the last few years, many still maintain expensive and usually wasteful industrial recruitment and retention incentive programs. Collectively, states spend more than $15 billion annually on firm-specific incentives. Economic development incentives are seldom targeted to specific economic development goals, other than to “shoot anything that flies,” while “claiming anything that falls.” For example, several years ago, half the jobs created by companies in Minneapolis that got tax subsidies paid less than $8 per hour – surely not the route to raising incomes in the Twin Cities. It’s not that incentives are a bad idea all the time, it’s that they mostly go to zero-sum activities. The lion’s share of incentives is spent to convince particular companies to stay put or to move in. They do nothing to encourage firms to boost training, R&D, or investment in new capital equipment, all things that would increase their productivity or innovative capability. Co-invest in the Work Force Skills: States need to adopt policies to ensure that American companies have the skilled workers they need to be productive, while simultaneously ensuring that American workers have the skills they need to navigate, adapt, and prosper in the New Economy. States can do several things to improve the skills of the workforce. Co-invest in an Infrastructure for Innovation: In an economy increasingly powered by technology and innovation, the ability of states to create an environment in which innovation thrives is critical to economic growth. But universities are not the only knowledge incubators; in fact, most knowledge is produced by companies. States need to foster strategies that enhance the ability of companies to produce and use knowledge. Support Industry Clusters: In regional economies, the whole is often greater than the sum of the parts. In other words, firms in related industries often cluster together in a particular region, allowing them to take advantage of common resources (e.g., a workforce trained in particular skills; technical institutes; a common supplier base). But

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clusters are important for another reason – in a knowledge-based economy, having knowledge is not enough; it must be shared, and in some regions clusters of firms that network and communicate are able to raise the overall knowledge levels that they can draw upon. Perhaps the best known cluster is California’s Silicon Valley, where a large agglomeration of high-tech firms makes it the world’s most vibrant technology region. But it’s not just Silicon Valley that has industry clusters, and many clusters do not consist of “high-tech” firms. As a result, states should reorient their economic development programs to support regional industrial clusters, both based on existing groups of firms but also around emerging clusters where the region has some initial capabilities (e.g., several firms and university research capabilities).

“Silicon Valley and the Culture of Entrepreneurship”

Boost Quality of Life: Because a skilled workforce is now the most important factor of production, a region’s pool of skilled workers is a key factor determining success. In the old economy, workers used to move to be near jobs. In the New Economy, companies increasingly look to move to where knowledge workers live. Because they are in greater demand and have more ability to be particular about who they work for and where they work, knowledge workers often choose to live in places that provide a high quality of life in addition to a good job. Most states face a number of challenges in creating a great quality of life, with high amenities, low crime, and good transportation. For many states, boosting mobility in the state’s crowded metropolitan areas is the most important task in improving quality of life. States like Washington, Georgia, California, Maryland, New York, and Massachusetts have major metropolitan areas that are near gridlock. Besides making life miserable for millions of commuters, road congestion severely reduces the economic attractiveness of a place. In spite of this, little has been done to solve road congestion. Between 1987 and 1998, while vehicle miles traveled on freeways or principal arteries in urban areas increased by 42 percent, lane miles increased only 16 percent (with almost all coming from reclassifying rural areas as urban). No wonder congestion has worsened. Help More Regions Succeed in the New Economy: In many states, the story of the 1990s was a common one: The state’s major metropolitan areas boomed, while other parts of the state, including rural regions and smaller cities dependent on traditional manufacturing, lagged behind. Such development patterns hurt state economies by raising costs in congested metro areas and unemployment rates in other areas. As a result, it’s incumbent upon states to develop and implement strategies that ensure that more regions thrive in the New Economy.

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Abstract from Robert D. Atkinson, PhD The 2002 State New Economy Index: The Progressive Policy

Institute, New Economy Project, June 2002. The primary message of the PPI report is obvious – state and local government, and economic leaders must continue to refine, or actually change the way they perceive economic development. Knowledge jobs, quality of life factors and clustered economic development all work hand-in hand with high tech industry. Clustering occurs when companies  in  “a  particular  industry  physically  locate  near each other. A cluster of companies can include competitors, suppliers, customers, and   distributors”.   26   Thus,   defense   contractors,   especially   aerospace   industries, and communications companies will continue to be propelled by high-tech innovation and clustering. A perfect example of industry cluster happened in San Antonio, with the transformation of Kelly Air Force Base into Kelly U.S.A. and then into the Port of San Antonio, as a major transportation hub. Also, the state-of-art Toyota truck plant, on the   city’s   southwest   side,   has   ushered   in   competitive   clustering   of   supporting industries. In short, technology companies thrive in areas where the supply of highly skilled specialists and innovative research are in abundance (think California Polytech, Stanford, and Massachusetts Institute of Technology) State and local governments are keenly in position to court and develop partnerships with research entities, often referred to as consortiums. Texas, at the start of 2008, remains especially well-positioned to attract new   or   expanding   high   tech   ventures.   Although   the   state’s   property   taxes are amongst the highest in the United States, other tax incentives known as abatements are virtually guaranteed to new businesses. The low-cost availability of energy in Texas is a welcome drawing card, compared to cost factors for energy in other high-tech regions such as California and New England. Summarily the state has managed to cast a wider net, in terms of economic development incentives for technology industries, by funding the Emerging Technology Fund and other incentives in the 2007-08 state budget.

Keys to the Future

A dynamic a readily available workforce is essential to business and economic development.   Key   industries   do   not   want   (or   can’t)   spend   months   or   years   training   potential employees. A turnkey labor force is an absolute necessity. The state education system in making great progress in meeting the technological job training skills needed for a service-driven, high-tech job market. However, businesses seeking to relocate or small start-ups are increasingly focused on quality of life issues. Relocating employees requires good public schools systems, residential areas with affordable housing, public

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safety, libraries, parks, recreational facilities, and even less tangibles such as sustainable assets (alternative energy, public transit, and bike routes). The factors of economic planning are obvious, as previously mentioned. Though the natural characteristics of the region dictate most of the wise or efficient economic decisions for governments, the same cannot be said for other aspects of public policy. The most important, and dynamic aspect of these decisions starts with the people (in socio-economic terms, the population). Just as the economy is measured by economic factors and indicators, the population is studied in terms of demographics, a statistical summary of the people, which is more than a bunch of numbers. Demographics allow government and other planners (businesses, and even the military) to study trends, in order to successfully create present-day and future public policy goals. For example, will there be enough single-family housing, and viable highway or mass transportation. How many elementary schools will accommodate projected growth, if the growth is in the segment of the population likely to have babies. Where are people moving to, or leaving from? The people, to paraphrase James Madison, are a great beast – the best we can do to measure it starts with the census data.

The People – Who is Texas, and who will be the Future?

Like economics, population trends reflect much about the political, social, and cultural features of a given region (recall the sections in the previous chapter that detail these). Typically, data used to develop and discuss population derives from the decennial United States Census, which is conducted nationally, every ten years. Regardless of the best efforts, the census is subject to an undercount ranging from 2-12% (for distinct categories of the population). As the name implies, the undercount is persons not counted, which really means groups (a cohort) of persons not counted. What sorts of groups, you may wonder. Anyone having filled out a census, or observed census results of some nature can attest to the categories – which define all of us in some way. Simply stated, the census questions form

the basis for measuring a population, just as we measure the economy by looking at different categories.

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Table 1.4: Percent Change in U.S. Population, 2005-2005

Total population, i.e., size, growth rates (including negative results) age, gender, race and ethnicity, and a variety of income measurements will provide governments, businesses and families a powerful source of insights and determinants. Imagine, for example, you have just graduated from college. You have interviewed for a variety of employment opportunities, but many are outside the area, or in other states. How will you base your decision? Or, after reading the previous section, you want to try your hand at e-commerce and start your own business. How will you know what to offer, or produce, and in what varieties? The answers start with using demographic data to base your decisions – even  if  it’s  just  picking  a  location  you  want  to  target. Now imagine you are the government of 24 million state residents. Governments must also use demographics to determine a variety of complex and far-reaching decisions. Unlike individuals, however, governments must consider population data combined with other data, such as economic growth, labor/employment, education data, to determine demographic trends. In order to better serve governments and planners, The  Census  Bureau’s   has  devised   the  American  Community  Survey,   to   augment   the   base data, in an effort to better define how we live and other dimensions of socio- economic  order  in  the  2000’s.

“How  to  Use  Demographic  &  GIS  Mapping  with  PolicyMap”

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Trends are very important indicators for governments at all levels, basically because governments need to plan well, and well in advance, to better maintain the quality of life and other vital needs within their spheres of responsibility. Of course, government may not plan well, or, more accurately, see the risks relative to the costs. Often, the political culture of the governed adds to the lack of comprehensive planning and civic responsibility (again, reflect back to the discussion of culture in chapter 2). Unfortunately, trends and estimates often are evident only in assigning blame or merely accounting for things after the fact. Most often, efforts by individual elements (a city council, a public school Superintendent, a governor) to plan ahead, or prevent get scuttled  by  mainstream  political  hype.  For  example,  Gov.  Rick  Perry’s  coup  at  the  start   of the 2007 Legislature, to implement a mandatory vaccine for girls, as an effort to prevent  genital  herpes.  One  could  argue  Perry’s  initiative  was  based  on  well-established demographics  about  the  teen  birth  rate…regardless,  the  politics  of  public  education,  the   state Legislature, and others put an abrupt halt to the measure. For students and taxpayers alike, the main purpose of demographics is establishing and analyzing choices. We can use statistics to help us make choices, but for academic purposes, we should focus on how demographics are or  aren’t  part  of  the  government’s   choices.  For  now,  let’s  establish  the  individual  categories  of  Texas’  population,  and  how   of each of these related measurements affects government planning.

Growth or Stability? Immigration, migration and natural population growth   account   for   the   state’s   27     percent   increase   during   the   1990’s,   and   13   percent   increase from 2000 through mid-2006.* The US Census Bureau 2006 American Community Survey estimates the total population of Texas at 23,507,783. Natural population growth is the extent to which live births exceed deaths. According to the Vital Statistics Bureau of the Center for Disease Control (CDC), the preliminary estimate of total births in the U.S. for 2006 was 4,265,996, a 3 percent increase – or 127,647 more births than in 2005. As a result of the increases in the birth rates for women aged 15-44, the total fertility rate – an estimate of the average number of births that a group of women would have over their lifetimes – increased 2 percent in 2006 to 2,101 births per 1,000 women. This is the highest rate since 1971 and the first time since then that the rate was above replacement – the level at which a given generation can  replace  itself.”  Texas  is  contributing  to  these  totals,  in  some  age  groups,  more  than any  other  state.  Table  1.5   illustrates  Texas’  percentages  of  natural  growth,   leading  all   three categories amongst the most populous states.

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Table 1.5 CDC Vital Statistics Bureau

Top 10 Most Populous States 2005 State Birth Rate Fertility Rate Teenage birth rate

California 15.2 71.3 38.8 Florida 12.7 65.6 42.4 Illinois 14.0 66.4 38.6

Michigan 12.6 61.0 32.5 New Jersey 13.1 63.9 23.4 New York 12.8 60.3 26.5

Ohio 12.9 63.0 38.9 Pennsylvania 11.7 58.7 30.4

Texas 16.9 77.6 61.6 Virginia 13.8 65.1 34.4

(Birth rates are live births per 1,000 estimated population in each area; fertility rates are live births per 1,000 women aged 15-44 years estimated in each area; teenage birth

rates are live births per 1,000 women aged 15-19) Overall,  only  Utah,  the  nations’  youngest  state,  exceeds  Texas’  birth rate. In terms of actual numbers, 386,000 babies were born in Texas, while California – with a population of 36.5 million, 13 million more than Texas – produced 550,000 newborns. Regardless of this  emerging   trend,  Texas’  exponential  growth  still  means   that  a   lot  of   folks are migrating here – from other US states, and obviously from other countries. Observers should also bear in mind the factors of migration, and their influence on the undercount, while determining the actual conditions in states receiving migrants (more on migration later in this section).

Table 1.6

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It’s   no   surprise   then,   that   Texas   passed   New   York   as   the   second  most   populous   state  during  the  1990’s.  A  useful  exercise  for  students  is  to  compare  Tables  1.4  and  1.6.   Observe the states with the highest rates of growth versus the total number of the population increase (1.6) Now look at the percentages on the map (1.4) You get a larger “view”  of  growth  patterns,  as  well  as   the  states   losing  ground.  The  western  states  are   experiencing the greatest overall gains, but when one considers the small populations of  these  states  (except  CA  and  TX),  the  growth  rate  doesn’t  seem  as  significant.  It  is,  of   course, especially given that the water supply is already strained in a number of these states, especially the top two growth states, Nevada and Arizona.

“Growth in Rockwall,  Texas”

For  these  same  reasons,  Texas’  growth  is  a  two-edged sword. The most significant point the tables indicate is that Texas growth rate is very high, and since it is already the 2nd most populous state, well, do the math as the saying goes! What this simply means is   that   a   lot   of   folks   are   moving   to   Texas,   and   it’s   happening   very   quickly.   What   is   beneficial about this scenario? First off, the next Census will grant more U.S. Representatives in the Congress, in the Electoral College (the number of votes a presidential candidate gets if he or she wins the most votes in our state), and also in granting various federal grants and programs. State and local governments gain revenues with growth. There are more sales and services to tax, more demand for consumer goods, more labor for businesses, more houses to build, more children to educate, and more highways for commuting. Hold on, you  might  think…don’t  kids  and  roads  “cost”  the  government a lot of money (as well as parents   and   taxpayers!)   That’s   correct   – more people do cost government more revenues, but the returns on these expenses are many. In short, this is the challenge for government  at  the  state,  and  especially  local  level…much more on this later! For now, keep  in  mind  the  culture  notes  from  the  previous  chapter.  Texas’  traditional,  piecemeal,   and minimalist approach to government has been experiencing the stress of exponential growth for over a decade. Teacher shortages, urban sprawl and gridlock, shifting inflation and economic growth, air quality, hazardous waste and environmental concerns   form   unprecedented   challenges.   Let’s   now   look   at   certain   demographic   measurements, such as age, race, and gender, and make some creative predictions.

The People A  population,  as   “a  people”  are   referred   to   in   the   language  of   social   science,   truly   forms the basis of all things economic and political. A population represents the essence  of,  and  the  greatest  challenge  facing  a  state’s  public officials. It represents the “who”  of  political  scientists  Harold  Lasswell’s  explanation  of  political  power:   “who  gets   what,  when,  where  and  why.”  In  short,  different  sectors  of  the  population  have  different

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“what’s,   and   “why’s,   etc.   Of   course   these   implications are rooted in political culture, again   from   the   previous   chapter.   Thus,   let’s   consider   the   “where”   part   of   Lasswell’s   equation,  in  terms  of  the  distribution  of  Texas’   people. According to the 2000 Decennial Census, 84.8   percent   of   Texas’ population lives in metropolitan areas. This is underscored by recent population growth trends – the   state’s   27 metro areas accounted for over 91 percent of Texas population growth between 1990-2000.  Growth   in   the  state’s  metropolitan  statistical  areas  or MSA’s is not evenly distributed, however. It is concentrated in the largest cities and their surrounding suburbs, even whole counties. Dallas, Houston, San Antonio and Austin have all witnessed the growth trend known as exurbia. The Brookings Institute defines exurbs as   “communities   located   on   the   urban   fringe   that   have   at   least   20   percent   of   their   workers commuting to jobs in an urbanized area, exhibit low housing density, and have relatively  high  population  growth.”   The common denominator amongst exurbs is the combination of growth and employment, resulting in the need to commute. Other areas with significant growth, but not   in   the   job  market   are   the  MSA’s   located   along   the   border   with  Mexico.  McAllen,   Brownsville and Laredo and the Lower Rio Grande  Valley  (generally  referred  to  as  “The   Valley”)   together   added   235,000,   between   2000   and   2006,   making   it   the   4th highest growth area in Texas – behind Dallas-Ft. Worth-Arlington (837,424), Houston- Sugarland-Baytown (770,311) and Austin-Round Rock (269,457). For government purposes, county-level data is also a very important demographic, since   counties   carry   out  much   of   the   state’s   administrative   functions   (more   on   this   in   chapter 10) Table 1.7 shows the growth patterns since the 2000 Census, for the ten most populous counties in Texas. The patterns described earlier (urban growth centers) are affirmed, but with greater clarity as county-level data illustrate migration to the suburbs adjacent to municipalities, and often the counties adjacent to the largest of Texas’  cities.

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Texas Future Population

Government and public policy, as well as business, industry and investment all tend to  rely  on  “projections”  or  educated  hypotheses,  (or  both)  about  future  realities.  Will  the   population shift, age more or live longer, develop new vital needs, migrate out, have more  children,  etc…it  is  obvious  that  growth  is  anticipated  for  generations  to  come.  One   need only observe changes, especially in the largest metro areas to conclude what the future of Texas will look like, at a minimum. Not surprisingly, growth and migration patterns are difficult to project, yet the importance of these efforts cannot be overstated. Planning   (especially   at   the   state   level)   is   contingent   on   accurate   estimates,   thus   it’s   good  sense  to  have  a  “plan  B”  or  “C”  for  that  matter. To effectively project future population trends, the following study produced by The University of Texas at San Antonio uses county level data to account for the recent pas, and projected patterns of migration. In the UTSA study, the net migration assumptions

Geographic area

Table 1.7–Population Estimates