Texas Comptroller: State economy safe despite recession fear

AUSTIN — Texas Comptroller Glenn Hegar said Texas is better prepared than other states to weather any storm should the country fall into a recession.

Hegar was one of hundreds of speakers at The Texas Tribune Festival on Friday that brings together politicians, pundits, journalists and more to discuss Texas politics and policies.

“I can sit up here and confidently say that I feel certain that the Texas economy, while we may enter a recession or not, we will not be in the location that other states and nations are,” Hegar said. “I think we will weather whatever uncertain storm is to a much greater degree than what others are.”

Earlier this week, the Federal Reserve approved an interest rate hike of three-quarters of a point as it tries to tamp down rising inflation and fears of recession. The hike takes the central bank’s benchmark lending rate to at least 3%, a historic move as the federal funds rate has not been this high since the global financial crisis in 2008. The Feds also hinted at another hike in the future.

Hegar, a Republican, said the rising interest rate will cause a slowdown in jobs growth, which continues to break records in Texas. In August, Texas added 16,400 nonfarm jobs, according to the Texas Workforce Commission.

But the Texas economy remains strong, said Hegar, whose job is to predict the Texas economy and present a revenue forecast to state lawmakers ahead of each legislative session. He also said he is working conservatively, as major “once-in-a-lifetime” events such as a pandemic or a winter storm that nearly collapses the state grid are impossible to predict.

Even so, the state’s historic economic gains are unmatched.

“Overall I feel much better in what I see on the horizon,” Hegar said. “Even though there is a cloud of uncertainty … the Texas economy is going to continue to grow and outpace the national average and the global average.”

In July, Hegar announced that the Texas legislature will have $149 billion to work with for the next biennium. This amount increased by more than $14 billion from previous predictions, to which Hegar largely attributed to inflation.

Hegar also said because of high inflation, where people were paying more for goods and therefore paying more in sales taxes, the state was able to reach these numbers. Global and national economic uncertainties are also influencing predictions.

“I made the point about uncertainty because there are global headwinds, there are national headwinds that are going to impact the state of Texas and our economy. There is no doubt about that,” Hegar said. “However, I continue to make the point that the foundation of the Texas economy overall is very strong.”