Friday Forum

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The Texas Century

By Craig Casselberry

For Texas, the hits keep coming. You’ve seen the news:  

• Chief Executive Magazine has named Texas the best place for business for 23 straight years

• We just took home a 12^th straight Governor’s Cup from Site Selection Magazine for the best state for business

• We are the Top Exporting state for 21 years in a row

• Home to the most Fortune 500 headquartered companies (55)

• And we’ve led the nation in population growth for the past 18 years

Oh, and Texas is the 8^th largest economy in the world.

This is not an overnight success story, and it’s not the so-called “Texas Miracle.”  It’s a story about the value of free enterprise, visionary entrepreneurs, innovation, and YES – limited government that allows these things to flourish.

It’s a success story built – purposely -- over the last 30 years. Let me explain.

Let’s talk about the future and how we got here.

The Texas entrepreneurial spirit – yes.  Vast natural resources – true. But it’s also about state government not overtaxing and overspending.

And not just staying out of the way but supporting public policy to allow business – particularly small business, which is 55% of net new jobs– to flourish.

And we’re not slowing down; Texas added 78,000 jobs in August, a 12^th straight month of growth, while most states are contracting. Texas led all states for jobs gained over the month and over the year and again set new records for total jobs, the number of Texans working, and the size of the Texas labor force.

In the mid-2010’s, an organization I co-founded (“Texas 2050”) with major Texas business and trade organizations began planning for a job-creating, strong Texas economy. Our core mission was to position Texas for economic growth over the long term. Today, we are seeing some of those objectives come to fruition. 

In 2023, the 88^th Texas Legislature:

• Made big investments in infrastructure (roads, water, broadband, semiconductors, and space)

• Cut property taxes for homeowners and businesses by $ 18 Billion

• Made new investments in manufacturing by passing HB 4 to create Chapter 403

• Invested substantially in public and higher education, including community colleges

• And kept a sizable surplus for good measure

What’s the next world-class industry for Texas to lead?  In addition to space and semiconductors, it may very well be data centers. A recent hearing of the Texas Senate Business and Commerce Committee made clear: expansion of the Texas data center sector will be critical to meet the needs of our modern economy.

In the digital age, data is not just a byproduct of our activities; it is the core asset that fuels innovation, drives efficiency, and propels economic growth. 

As organizations increasingly rely on data analytics, cloud computing, and advanced technologies to gain a competitive edge, the demand for robust data center infrastructure has never been higher. The industry is poised to invest $ 200 Billion a year – and almost $ 1 Trillion over the next five years – in data centers to process information in our modern world. That’s an incredible amount of capital investment and Texas should see a good chunk of it if we don’t regulate ourselves out of the conversation.

This makes Governor Abbott, Lt. Governor Patrick, and others’ call to double investment in the Texas Energy Fund a wise move, indeed.

That data flow will include Artificial Intelligence (AI), supportive of legislative information like the USLege platform, another obvious boom sector that Texas can and should understand, lead, and control.  Some consider it a national security issue. 

Forward-thinking isn’t new to Texas. The oil and real estate crash in Texas in the mid-1980’s was a tough time for many. Amid the crash, the Texas Legislature had the foresight to establish the Economic Stabilization Fund (ESF), more commonly known as the “Rainy Day” Fund, to sock money away for the next tough time. 

Today, the ESF is approaching $20 Billion dollars and helps Texas keep the highest credit rating on the market.

Has Texas benefited from bad decisions in other states?  Sure.  But we didn’t follow those states over the cliff.

While Texas has inherent advantages and a policy climate built for growth, tax incentives still help. A modernized incentive called the “Texas Jobs, Energy, Technology, and Innovation Act” (JETI Act) will encourage development of projects for things to add capacity to our power grid, such as a natural-gas-fueled generator or batteries, production of hydrogen fuel, a seawater desalination project, oil and gas facilities, fossil fuel power generators and semiconductor fabricators.

I fully expect the 89^th Texas Legislature to continue investing in job growth, perhaps with emphasis on skills training and workforce development and, dare we say, more tax cuts.   After all, we are expecting a budget surplus of around another $ 20 Billion when the Legislature convenes in January.

I mentioned earlier that Texas is the 8^th largest economy in the world.  If recent trends continue, today Texas will add another 2,500 jobs and U-Haul will rent 10 trucks on the way from job-killing California to business-friendly Texas, and just 1 truck going the other way. 

We are almost a quarter into the 21^st Century and a strong foundation is set to carry Texas for many more years. 

• Texas has a public policy climate built for growth.  We encourage innovation, we don’t stifle it with needless regulations

• No state income tax – attractive for employers because their employees love it

• A strong economic development ecosystem – from the executive branch to local Chambers of Commerce and EDC’s, the best in the country

• A robust and skilled workforce that’s growing and adapting to innovation

We are set up for long-term success that we might someday call the “The Texas Century.”

Craig Casselberry is the Founder & CEO of Quorum Public Affairs, Inc. You can follow Craig on X and Linkedin.

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