State’s Jobless Rate Still Double the Record Low

The state’s unemployment rate dropped to 6.8% in January, down a tick from December’s 6.9% rate but double the record low of 3.4% in May 2019. It is unclear what effect the mid-February winter storm had on employment, when power outages swept the state and many roads were impassable. We’ll find out next month.

What is certain is that state lawmakers must grapple with a revenue shortfall as they build a biennial budget, since sales tax revenues are down from the previous year. The state comptroller’s office announced February sales tax revenues totaled $2.68 billion, down 7.5% from the same period last year.

Sales taxes account for most of the state’s revenues. Texas Comptroller Glenn Hegar announced in January that the state was running a $1 billion deficit for the current budget. Hegar estimated state budget writers will have an estimated $112.5 billion in revenue available for the next two-year budget, which is nearly $500 million less than the total current budget.

Hegar said the forecast could change due to uncertainties such as the continuing effect of the pandemic, oil and gas revenues and how quickly the state’s economy rebounds as the state fully reopens.

Abbott, Patrick Spar Over PUC, ERCOT

The market monitor for the Public Utility Commission has revised its claim that the Electric Reliability Council of Texas overcharged power companies by $16 billion during the winter storm, saying last week that the actual amount is $4.2 billion.

Gov. Gregg Abbott has made legislation relating to correcting any ERCOT billing errors an emergency item. In a highly unusual move, Lt. Gov. Dan Patrick showed up at a state senate committee hearing to question the lone remaining member of the PUC — new chair Arthur D’Andrea. Patrick on Friday night called on Abbott to replace D’Andrea after he fills the other two vacancies on the PUC. Patrick also said Abbott should intercede to “correct” the pricing error.

Abbott quickly — and tersely — responded to Patrick, saying that, as a former Supreme Court Justice and former Attorney General, the governor’s legal view is that he does not have “independent authority to accomplish the goals you seek,” which is why he made the issue an emergency item for the Legislature to consider. This saga is far from over.