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Texas Legislature 4/26/89 [OA 8747] [1]
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Texas Legislature 4/26/89 [OA 8747] [1]
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Mark Davis Subject Files
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Originally Processed With FOIA(s):
FOIA Number:
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection: George H.W. Bush Presidential Records
Collection/Office of Origin: Speechwriting, White House Office of
Series:
Davis, Mark, Files
Subseries:
Subject File, 1989-1991
OA/ID Number:
13874
Folder ID Number:
13874-010
Folder Title:
Texas Legislature, 4/26/89 [1]
Stack:
Row:
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G
19
2
6
7
4/25
INAL
5:15pm
REMARKS: TEXAS STATE LEGISLATURE
CAPITOL, AUSTIN
APRIL 26, WED., 4:40 P.M.
((IT's A GOOD THING THIS ISN'T BILL CLEMENTS'
BIRTHDAY
...
FROM WHERE I'M STANDING, ANOTHER PLAID
DAY IN THE TEXAS LEGISLATURE COULD BLIND A FELLA.))
- 2 -
IN ALL SINCERITY, HAPPY BELATED BIRTHDAY BILL
LIEUTENANT GOVERNOR BILL HoBBy, IT'S GREAT TO SEE YOU
AGAIN. SPEAKER GIB LEWIS, DISTINGUISHED LEGISLATORS,
FELLOW TEXANS, THANK YOU
...
I'M DELIGHTED TO BE BACK
IN AUSTIN, WITH so MANY FRIENDS
...
I WILL WANT TO DISCUSS A FEW ISSUES FACING TEXAS
AND ALL OF AMERICA. [[AGRICULTURE COMMISSIONER
HIGHTOWER'S VIEWS TO THE CONTRARY, ]] I AM A TEXAN.
- 3 -
So LET US SAY A FEW WORDS ABOUT WHAT IT MEANS TO BE A
TEXAN.
LIKE THE FORMER KINGDOM OF HAWAII, TEXAS IS A
NATION THAT HAD TO RECONCILE ITSELF TO BEING A STATE.
BUT, LIKE HAWAII, WE WILL NEVER RECONCILE OURSELVES TO
BEING ORDINARY. FROM THE PECOS TO THE PEDERNALES, FROM
THE RAPIDS OF THE RIO GRANDE TO THE BROAD EXPANSE OF
THE MUDDY RED RIVER, THERE IS NO PLACE ON EARTH LIKE
TEXAS
- 4 -
NOR IS THERE ANOTHER CAPITOL IN AMERICA QUITE LIKE
THIS ONE, BUILT OF A ROSE-TINGED GRANITE THAT BLUSHES
IN A LOW SUN. AND, THIS BEING TEXAS, WE HAD TO BUILD A
CAPITOL THAT IS EXACTLY ONE FOOT TALLER THAN THE ONE IN
WASHINGTON. TEXAS CERTAINLY STANDS TALL IN THE HEART
OF THIS PRESIDENT
PERHAPS FOR THIS REASON, LARRY MCMURTRY IS ONE OF
MY FAVORITE WRITERS.
- 5 -
IN LONESOME DOVE, HE DESCRIBES THE MYTHIC TEXAS, AND
CONJURES THAT SENSE OF PLACE WE ALL KNOW so WELL. I AM
INSPIRED BY A MAN OF LETTERS WHO CAN CONVINCINGLY ADOPT
THE VOICE OF COWBOYS AND OUTLAWS -- MEN WHOSE ONLY
SCHOOLING WAS IN DODGING BULLETS, WHOSE ONLY LESSONS
WERE IN HOW TO RUN OR RUSTLE CATTLE.
BUT, UNLIKE DAVY CROCKETT, I FIRST SET OUT FOR
TEXAS NOT ON HORSEBACK FROM TENNESSEE, BUT FROM
CONNECTICUT IN A RED STUDEBAKER IN JUNE, 1948.
- 6 -
MORE THAN FORTY YEARS LATER, THAT TRIP IS STILL A VIVID
MEMORY -- HIGHWAY 80, A NEON PEARL BEER SIGN APPEARING
IN THE DESERT TWILIGHT LIKE AN APPARITION. STOPPING AT
A CAFE, I DIDN'T KNOW IF A CHICKEN FRIED STEAK WAS A
CHICKEN FRIED LIKE A STEAK, OR A STEAK THAT TASTED LIKE
CHICKEN
STILL, BARBARA AND I SETTLED IN TEXAS, AS DID S0
MANY BEFORE US. WE RAISED FIVE CHILDREN, HELPED BUILD
A BUSINESS.
- 7 -
AND IN THAT SPAN OF FORTY YEARS, I WATCHED THIS STATE
GROW INTO EVEN GREATER GLORY. IN MY LIFETIME I HAVE
SEEN THE OIL WEALTH OF WEST TEXAS HELP FINANCE THE
BUILDING OF GREAT CITIES, AND THE EXPANSION OF FIRST-
CLASS LAND GRANT COLLEGES -- THE ORIGINS OF A TEXAS
RENAISSANCE, IF YOU WILL. THE ENERGY BUSINESS HELPED
MAKE TEXAS WHAT IT IS TODAY -- THE THIRD COAST OF THE
UNITED STATES
- 8 -
THIS TEXAS RENAISSANCE LASTED FOR YEARS, EVEN
DECADES. BUT YOU ALSO KNOW ANOTHER MORE RECENT CHAPTER
OF THE TEXAS STORY -- OIL CHEAPER THAN FANCY MINERAL
WATER, SKYLINES OF EMPTY BUILDINGS, EXPENSIVE HOMES TO
BE HAD FOR MONTHLY PAYMENTS, AND THOUSANDS OF LAID-OFF
WORKERS.
Now, I'M NO COWBOY. I PITCH HORSESHOES, BUT I
DON'T RIDE BRONCOS.
- 9 -
BUT I UNDERSTAND THAT COWBOYS HAVE A TERM FOR THE MOST
DANGEROUS AND CUNNING BRONCO OF ALL: THEY CALL IT A
"SUNFISHER." THESE BRONCOS WILL REBEL AGAINST A RIDER
BY ADOPTING A MOTION NOT UNLIKE THE SUNFISH OF THE GULF
-- A FULL-FORCE LEAP INTO THE AIR, BACK ARCHED HIGH,
FLANK TWISTING THE RIDER TO THE LEFT, HEAD AND UPPER
TORSO TWISTING THE RIDER TO THE RIGHT, IN AN ATTEMPT TO
TEAR HIM APART.
- 10 -
LET ME SUGGEST THAT IN THE LAST FEW YEARS, THE WHOLE
STATE OF TEXAS FEELS LIKE IT HAS BEEN ON JUST SUCH A
RIDE
STRONG MEN AND WOMEN ARE CHALLENGED BY ADVERSITY.
I BELIEVE TEXANS HAVE PROVEN THAT
THERE MAY BE A
FEW MORE BUMPS AND BRUISES AHEAD. BUT MAKE NO MISTAKE,
TEXAS IS BACK IN THE SADDLE AGAIN.
- 11 -
STATE UNEMPLOYMENT HAS DIPPED TO ITS LOWEST LEVEL
IN FOUR YEARS, SIGNALING THE DIVERSIFICATION OF THE
TEXAS ECONOMY. IN 1970, THE ENERGY SECTOR ACCOUNTED
FOR NEARLY 25 PERCENT OF STATE OUTPUT. LAST YEAR, IT
ACCOUNTED FOR ONLY 11.4 PERCENT. AND YET TEXAS HAS
MORE THAN REGAINED THE 208,000 JOBS IT LOST FROM 1986
TO 1987, WITH EMPLOYMENT IN PLASTICS, AVIATION,
ELECTRONICS, SPACE AND COMPUTER PROGRAMMING LEADING THE
WAY.
- 12 -
MORE PEOPLE ARE AT WORK IN TEXAS TODAY THAN EVER
BEFORE. THE DALLAS-FORT WORTH "METROPLEX" LEADS IN
DEFENSE AND AVIATION TECHNOLOGY; HOUSTON IN SPACE AND
BIOMEDICAL RESEARCH; AUSTIN, IN MICROELECTRONICS.
ANOTHER SIGN THAT TEXAS IS BECOMING A WORLD CENTER
OF TECHNOLOGY IS THE SELECTION OF ELLIS COUNTY AS THE
SITE OF THE SUPERCONDUCTING SUPER COLLIDER
- 13 -
WHEN BUILT, THE SSC WILL ENABLE US TO STUDY ELEMENTAL
PARTICLES WITH NAMES LIKE QUARKS, MESONS (MAY-SAHNS)
AND NEUTRINOS. ((SOUNDS TO ME LIKE THE BREAKFAST
CEREAL THE BUSH GRANDKIDS HAVE BEEN EATING.))
WELL, AS ToM LUCE, CHAIRMAN OF THE TEXAS NATIONAL
RESEARCH LABORATORY COMMISSION SAID, WITH A LITTLE
IMAGINATION, YOU CAN: "CONCLUDE THAT FUTURE RESEARCH IN
THE FIELD OF HIGH ENERGY COULD SOME DAY HELP US CONQUER
CANCER."
- 14 -
OR DISCOVER A WAY TO BOOST THE AMOUNT OF INFORMATION ON
A MICROCHIP. OR ANSWER QUESTIONS THAT ELUDED EINSTEIN,
GIVING US A GLIMPSE OF THE FORCES THAT BIND THE
UNIVERSE TOGETHER. THE SSC IS A KEY TO UNDERSTANDING
NATURE, AND TO DEVELOPING THE TECHNOLOGIES AND
INDUSTRIES OF THE 21st CENTURY. LET ME ASSURE YOU, I
WILL BACK THE CONSTRUCTION OF THE SSC BECAUSE IT IS
GOOD FOR AMERICA
- 15 -
AND LET ME ALSO SALUTE YOU, THE MEMBERS OF THE
TEXAS HOUSE AND SENATE, AND THE VOTERS OF THIS STATE,
FOR HAVING THE VISION TO TAKE AN EARLY LEAD ON THIS
PROJECT
STILL, NO MATTER HOW DIVERSIFIED AND HIGH-TECH
TEXAS BECOMES, A STRONG DOMESTIC ENERGY INDUSTRY IS
IMPORTANT TO THE FUTURE OF THIS STATE AND ALL OF
AMERICA. I FIND IT DISTURBING THAT NEARLY 50 PERCENT
OF AMERICA'S OIL IS IMPORTED.
- 16 -
THIS IS NOT GOOD FOR OUR NATIONAL SECURITY.
SOME ARE QUESTIONING THE FUTURE OF AMERICA'S ENERGY
PRODUCTION IN THE AFTERMATH OF THE WRECK OF THE Exxon
VALDEZ OFF ALASKA. I AM AS CONCERNED AS YOU -- AND ALL
AMERICANS -- ARE BY THE ENVIRONMENTAL TRAGEDY IN PRINCE
WILLIAM SOUND. WE ARE USING FEDERAL RESOURCES
INTELLIGENTLY IN THE CLEAN-UP EFFORT. WE ARE WORKING
WITH INDUSTRY TO DEVELOP AN IMPROVED PLAN IN EVENT OF A
FUTURE SPILL.
- 17 -
BUT SHUTTING DOWN OUR DOMESTIC ENERGY PRODUCTION IS NO
ANSWER, AND WOULD MERELY INCREASE OUR DEPENDENCE ON
FOREIGN OIL. WE MUST, AND WE WILL, MAINTAIN A STRONG,
DOMESTIC ENERGY INDUSTRY.
To REDUCE OUR DEPENDENCE ON FOREIGN OIL, WE MUST
RETURN TO HIGH LEVELS OF EXPLORATORY DRILLING. I
PROPOSE TO STIMULATE DOMESTIC DRILLING WITH TAX CREDITS
AND OTHER INCENTIVES. WE NEED MORE RESEARCH TO LEARN
HOW TO RECOVER MORE SECONDARY AND TERTIARY OIL.
- 18 -
AND I WANT TO DO SOMETHING ELSE. TEXAS HAS A 65-YEAR
SUPPLY OF ONE OF THE CLEANEST FORMS OF ENERGY KNOWN TO
MAN -- NATURAL GAS. I CALL ON CONGRESS, AT LONG LAST,
TO FULLY DECONTROL NATURAL GAS
I BELIEVE THAT
THIS WILL HAPPEN SOON.
WE NEED A NATIONAL ENERGY POLICY THAT RELIES NOT
ONLY ON OIL, BUT ON MANY OTHER SOURCES. I BELIEVE WE
CAN AND MUST USE MORE SAFE NUCLEAR POWER.
- 19 -
I BELIEVE THAT COAL HAS A BRIGHT FUTURE. You KNOW MY
CONFIDENCE IN NATURAL GAS.
As WE ALL BECOME INCREASINGLY CONCERNED ABOUT THE
NEED FOR CLEAN AIR, WE MUST LOOK MORE TO NATURAL GAS
AND TO NUCLEAR POWER. WE MUST PRODUCE MORE OF OUR CORN
CROP TO PRODUCE ETHANOL, MORE OF OUR NATURAL GAS TO
PRODUCE METHANOL
GREATER USE OF THESE TWO WILL
RAPIDLY IMPROVE THE AIR QUALITY OF OUR MOST HEAVILY
POLLUTED CITIES.
- 20 -
I KNOW THERE ARE STILL A FEW DARK CLOUDS REMAINING
ON OUR ECONOMIC HORIZON. I KNOW THAT YOU ARE CONCERNED
ABOUT THE CONTINUING CRISIS IN MANY SAVINGS AND LOAN
INSTITUTIONS. I HAVE ASKED FOR MEASURES TO RESTORE
THESE INSTITUTIONS TO FINANCIAL HEALTH. AND I HAVE
ASKED FOR $37 MILLION IN 1989 FUNDS FOR THE JUSTICE
DEPARTMENT, SO THAT THOSE WHO WILLFULLY ABUSE THE TRUST
OF SMALL SAVERS CAN EXPECT To BE PURSUED, AND PUT IN
PRISON ...
- 21 -
THE U.S. SENATE HAS ACTED EXPEDITIOUSLY ON THE S & L
BILL, WITH STRONG SUPPORT FROM DEMOCRATS AND
REPUBLICANS ALIKE. I CALL ON THE HOUSE OF
REPRESENTATIVES TO PASS A RESPONSIBLE S & L BILL AS
SOON AS POSSIBLE.
TEXAS, LIKE ALL OF AMERICA, FACES MANY CHALLENGES.
BUT I BELIEVE THAT BY WORKING TOGETHER, AS REPUBLICANS
AND DEMOCRATS, AS FEDERAL AND AS STATE OFFICIALS, WE
CAN LICK ANY PROBLEMS DOWN THE PATH.
- 22 -
FEDERALISM WORKS BECAUSE OF YOUR LEADERSHIP AND YOUR
INITIATIVE. THE OLD DICTUM OF THE BEST GOVERNMENT
BEING THAT WHICH IS CLOSEST TO THE PEOPLE APPLIES HERE,
IN AUSTIN. ((You KNOW, ANN RICHARDS WAS RIGHT ABOUT
THAT SILVER FOOT. I KEPT PUTTING IT IN MY MOUTH ALL
ALONG. BUT THE BOTTOM LINE IS, WHEN THEY ASK "WHERE'S
GEORGE?"
...
SAY HE'S IN AUSTIN, AND DAMNED PROUD TO
BE BACK ))
- 23 -
TRUE, SOME PROBLEMS OF THE RECENT PAST LINGER.
SOME AREAS OF THE STATE ARE RECOVERING MORE SLOWLY THAN
OTHERS. BUT THE WAY IS CLEAR TO A FUTURE AS BRIGHT AND
PROMISING AS THE BLUE TEXAS SKY -- A NEW RELIANCE ON A
DIVERSIFIED ECONOMY, AND THE TECHNOLOGIES OF THE NEXT
CENTURY. THIS IS THE SECRET OF THE TEXAS TURNAROUND,
AND ITS UNFOLDING IS A TRIBUTE TO THE LEADERSHIP OF
BILL CLEMENTS, SENATORS GRAMM AND BENTSEN, AND THE MEN
AND WOMEN OF THE TEXAS LEGISLATURE
- 24 -
TEXAS IS STARTING TO FEEL LIKE ITS OLD SELF AGAIN.
THERE IS AGAIN A FEELING AMONG TEXANS THAT ANYTHING IS
POSSIBLE -- WHO KNOWS, THE RANGERS OR THE ASTROS MIGHT
EVEN WIN THE WORLD SERIES
As WE FACE OUR FUTURE IN THE WHITE HOUSE, BARBARA
AND I TAKE WITH US MEMORIES OF PEOPLE AND PLACES FROM A
STATE THAT HAS BEEN HOME FOR MOST OF OUR LIVES.
- 25 -
WE REMEMBER DRIVING THE KIDS ACROSS TEXAS, AND
SLOWING DOWN so WE COULD TAKE IN THE FIELDS OF
BLUEBONNETS AND INDIAN PAINTBRUSH.
WE REMEMBER THE PEOPLE OF HOUSTON, MANY OF THEM
MATURE AND SKEPTICAL, BUT WHO NONETHELESS LISTENED TO A
GREEN YOUNG MAN AND SENT HIM TO CONGRESS.
- 26 -
AND I REMEMBER LYNDON JOHNSON AT HIS RANCH BACK IN
1969, AN ELDER DEMOCRAT GIVING NEIGHBORLY ADVICE TO A
YOUNG REPUBLICAN, WHILE HIS VERY SPECIAL LADY BIRD HELD
OUT HER HAND IN HOSPITALITY.
BARBARA AND I TREASURE THESE 41 YEARS AS TEXANS --
THE SIGHTS AND SOUNDS OF HALF A LIFETIME, THE TRUST OF
MANY FRIENDS, AND THE LOVE OF A FAMILY. ALL THIS AND
MORE, WE REMEMBER WHENEVER WE THINK OF HOME
...
- 27 -
LET ME THANK YOU FOR INVITING US BACK TO AUSTIN.
GOD BLESS YOU. AND GOD BLESS THE UNITED STATES OF
AMERICA.
#
#
#
WITH GB CHANGES
Davis/Wallace
April 21, 8 p.m.
Title: Texas
Draft: Three
PRESIDENTIAL REMARKS: TEXAS STATE LEGISLATURE
CAPITOL, AUSTIN
APRIL 26, WED., 4:40 p.m.
((It's a good thing this isn't Bill Clements' birthday
From where I'm standing, another Plaid Day in the Texas
Legislature could blind a fella.))
In all sincerity, happy belated birthday Bill
Lieutenant Governor Bill Hobby, it's great to see you again.
Speaker Gib Lewis, distinguished legislators, fellow Texans,
thank you
I'm delighted to be back in Austin, with so many
friends
I will want to discuss a few issues facing Texas and all of
America. Agriculture Commissioner Hightower to the contrary, I
am a Texan. So let us say a few words about what it means to be
a Texan.
Like the former kingdom of Hawaii, Texas is a nation that
had to reconcile itself to being a state. But, like Hawaii, we
will never reconcile ourselves to being ordinary. From the Pecos
to the Pedernales, from the rapids of the Rio Grande to the broad
2
expanse of the muddy Red River, there is no place on earth like
Texas
Nor is there another capitol in America quite like this one,
built of a rose-tinged granite that blushes in a low sun. And,
this being Texas, we had to build a capitol that is exactly one
foot taller than the one in Washington. Texas certainly stands
tall in the heart of this President
Perhaps for this reason, Larry McMurtry is one of my
favorite writers. In Lonesome Dove, he describes the mythic
Texas, and conjures that sense of place we all know so well. I
am inspired by a man of letters who can convincingly adopt the
voice of cowboys and outlaws -- men whose only schooling was in
dodging bullets, whose only lessons were in how to run or rustle
cattle.
But, unlike Davy Crockett, I first set out for Texas not on
horseback from Tennessee, but from Connecticut in a red
Studebaker in June, 1948. More than forty years later, that trip
is still a vivid memory --the lonesome road, a neon Pearl Beer
sign appearing in the desert twilight like an apparition.
Stopping at a cafe, I didn't know if a chicken fried steak was a
chicken fried like a steak, or a steak that tasted like chicken
.
3
still, Barbara and I settled in Texas, as did so many before
us. We raised five children, built a business. And in that span
of forty years, I watched this state grow into even greater
glory. The Texas of the epic movie Giant seemed almost ordinary
in the fifties, with bluejeaned millionaires as thick as jack
rabbits in the Permian Basin. It has been noted that the wealth
of merchants preceded the Renaissance of Michelangelo. In my
lifetime I have seen the oil wealth of West Texas finance the
building of great cities, and the expansion of first-class land
grant colleges -- the origins of a Texas Renaissance, if you
will. The energy business helped make Texas what it is today --
the Third Coast of the United States
This Texas Renaissance lasted for years, even decades. But
you also know another more recent chapter of the Texas story --
oil cheaper than fancy mineral water, skylines of empty
buildings, expensive homes to be had for monthly payments, and
thousands of laid-off workers.
Now, I'm no cowboy. I pitch horseshoes, but I don't ride
broncos. But I understand that cowboys have a term for the most
dangerous and cunning bronco of all: they call it a "sunfisher,"
These broncos will rebel against a rider by adopting a motion not
unlike the sunfish of the Gulf -- a full-force leap into the air,
back arched high, flank twisting the rider to the left, head and
upper torso twisting the rider to the right, in an attempt to
4
tear him apart. Let me suggest that in the last few years, the
whole state of Texas feels like it has been on just such a ride
Strong men and women are challenged by adversity. I believe
Texans have proven that
There may be a few more bumps and
bruises ahead. But make no mistake, Texas is back in the saddle
again.
State unemployment has dipped to its lowest level in four
years, signaling the diversification of the Texas economy. In
1970, the energy sector accounted for nearly 25 percent of state
output. Last year, it accounted for only 11.4 percent. And yet
Texas has more than regained the 208,000 jobs it lost from 1986
to 1987, with employment in plastics, aviation, electronics,
space and computer programming leading the way. More people are
at work in Texas today than every before. The Dallas-Fort Worth
"Metroplex" leads in defense and aviation technology; Houston in
space and biomedical research; Austin, in microelectronics.
Another sign that Texas is becoming a world center of
technology is the selection of Ellis County as the site of the
Superconducting Super Collider
When built, the SSC will
enable us to study elemental particles with names like quarks,
mesons (May-sahns) and neutrinos. ((Sounds to me like the
breakfast cereal the Bush grandkids have been eating. ))
5
Well, as Tom Luce, chairman of the Texas National Research
Laboratory Commission said, with a little imagination, you can:
"conclude that future research in the field of high energy could
some day help us conquer cancer." or discover a way to boost the
amount of information on a microchip. or answer questions that
eluded Einstein, giving us a glimpse of the forces that bind the
universe together. The SSC is a key to understanding nature, and
to developing the technologies and industries of the 21st
Century. Let me assure you, I will back the construction of the
SSC because it is good for America
And let me also salute you, the members of the Texas House
and Senate, and the voters of this state, for having the vision
to take an early lead on this project
still, no matter how diversified and high-tech Texas
becomes, a strong domestic energy industry is important to the
future of this state and all of America. I find it disturbing
that nearly 50 percent of America's oil is imported. This is not
good for our national security.
Some are questioning the future of America's energy
production in the aftermath of the wreck of the Exxon Valdez off
Alaska. I am as concerned as you -- and all Americans -- are by
the environmental tragedy in Prince William Sound. We are using
6
federal resources intelligently in the clean-up effort. We are
working with industry to develop an improved plan in event of a
future spill. But shutting down our domestic energy production
is no answer, and would merely increase our dependence on foreign
oil. We must, and we will, maintain a strong, domestic energy
industry.
To reduce our dependence on foreign oil, we must return to
high levels of exploratory drilling. I propose to stimulate
domestic drilling with tax credits and other incentives. We need
more research to learn how to recover more secondary and tertiary
oil. And I want to do something else. Texas has a 65-year
supply of one of the cleanest forms of energy known to man --
natural gas. I call on Congress, at long last, to fully
decontrol natural gas
I believe that this will happen
soon.
We need a national energy policy that relies not only on
oil, but on many other sources. I believe we can and must use
more safe nuclear power. I believe that coal has a bright
future. You know my confidence in natural gas.
As we all become increasingly concerned about the need for
clean air, we must look more to natural gas and to nuclear power.
We must produce more of our corn crop to produce ethanol, more of
our natural gas to produce methanol
Greater use of these
7
two will rapidly improve the air quality of our most heavily
polluted cities.
I know there are still a few dark clouds remaining on our
economic horizon. I know that you are concerned about the
continuing crisis in many savings and loan institutions. I have
asked for measures to restore these institutions to financial
health. And I have asked for $37 million in 1989 funds for the
Justice Department, so that those who willfully abuse the trust
of small savers can expect to be pursued, and put in prison
The U.S. Senate has acted expeditiously on the S & L bill, with
strong support from Democrats and Republicans alike. I call on
the House of Representatives to pass a responsible S & L bill as
soon as possible.
Texas, like all of America, faces many challenges. But I
believe that by working together, as Republicans and Democrats,
as federal and as state officials, we can lick any problems down
the path. Federalism works because of your leadership and your
initiative. The old dictum of the best government being that
which is closest to the people applies here, in Austin. ((You
know, Ann Richards was right about that silver foot. I kept
putting it in my mouth all along. But the bottom line is, when
they ask "Where's George?"
say he's in Austin, and damned
proud to be back
))
8
True, some problems of the recent past linger. Some areas
of the state are recovering more slowly than others. But the way
is clear to a future as bright and promising as the blue Texas
sky -- a new reliance on a diversified economy, and the
technologies of the next century. This is the secret of the
Texas turnaround, and its unfolding is a tribute to the
leadership of Bill Clements, Senators Gramm and Bentsen, and the
men and women of the Texas Legislature
Texas is starting
to feel like its old self again. There is again a feeling among
Texans that anything is possible -- who knows, the Rangers or the
Astros might even win the World Series
As we face our future in the White House, Barbara and I take
with us memories of people and places from a state that has been
home for most of our lives.
We remember driving the kids across Texas, and slowing down
so we could take in the fields of bluebonnets and Indian
paintbrush.
We remember the people of Houston, many of them mature and
skeptical, but who nonetheless listened to a green young man and
sent him to Congress.
And I remember Lyndon Johnson at his ranch back in 1969, an
elder Democrat giving neighborly advice to a young Republican,
9
while his very special Lady Bird held out her hand in
hospitality.
Barbara and I treasure these 41 years as Texans -- the
sights and sounds of half a lifetime, the trust of many friends,
and the love of a family. All this and more, we remember
whenever we think of home
Let me thank you for inviting us back to Austin. God bless
you. And God bless the United States of America.
#
#
#
Davis/Wallace
April 25, 6 a.m.
Title: Texas2
Draft: Three
PRESIDENTIAL REMARKS: TEXAS STATE LEGISLATURE
CAPITOL, AUSTIN
APRIL 26, WED., 4:40 p.m.
((It's a good thing this isn't Bill Clements' birthday
...
From where I'm standing, another Plaid Day in the Texas
Legislature could blind a fella.))
In all sincerity, happy belated birthday Bill
Lieutenant Governor Bill Hobby, it's great to see you again.
Speaker Gib Lewis, distinguished legislators, fellow Texans,
thank you
I'm delighted to be back in Austin, with so many
friends
I will want to discuss a few issues facing Texas and all of
America. Agriculture Commissioner Hightower's views to the
contrary, I am a Texan. So let us say a few words about what it
means to be a Texan.
Like the former kingdom of Hawaii, Texas is a nation that
had to reconcile itself to being a state. But, like Hawaii, we
will never reconcile ourselves to being ordinary. From the Pecos
to the Pedernales, from the rapids of the Rio Grande to the broad
2
expanse of the muddy Red River, there is no place on earth like
Texas
Nor is there another capitol in America quite like this one,
built of a rose-tinged granite that blushes in a low sun. And,
this being Texas, we had to build a capitol that is exactly one
foot taller than the one in Washington. Texas certainly stands
tall in the heart of this President
Perhaps for this reason, Larry McMurtry is one of my
favorite writers. In Lonesome Dove, he describes the mythic
Texas, and conjures that sense of place we all know so well. I
am inspired by a man of letters who can convincingly adopt the
voice of cowboys and outlaws -- men whose only schooling was in
dodging bullets, whose only lessons were in how to run or rustle
cattle.
But, unlike Davy Crockett, I first set out for Texas not on
horseback from Tennessee, but from Connecticut in a red
Studebaker in June, 1948. More than forty years later, that trip
is still a vivid memory -- Highway 80, a neon Pearl Beer sign
appearing in the desert twilight like an apparition. Stopping at
a cafe, I didn't know if a chicken fried steak was a chicken
fried like a steak, or a steak that tasted like chicken
3
Still, Barbara and I settled in Texas, as did so many before
us. We raised five children, helped build a business. And in
that span of forty years, I watched this state grow into even
greater glory. In my lifetime I have seen the oil wealth of
West Texas help help finance the building of great cities, and
the expansion of first-class land grant colleges -- the origins
of a Texas Renaissance, if you will. The energy business helped
make Texas what it is today -- the Third Coast of the United
States
This Texas Renaissance lasted for years, even decades. But
you also know another more recent chapter of the Texas story --
oil cheaper than fancy mineral water, skylines of empty
buildings, expensive homes to be had for monthly payments, and
thousands of laid-off workers.
Now, I'm no cowboy. I pitch horseshoes, but I don't ride
broncos. But I understand that cowboys have a term for the most
dangerous and cunning bronco of all: they call it a "sunfisher."
These broncos will rebel against a rider by adopting a motion not
unlike the sunfish of the Gulf -- a full-force leap into the air,
back arched high, flank twisting the rider to the left, head and
upper torso twisting the rider to the right, in an attempt to
tear him apart. Let me suggest that in the last few years, the
whole state of Texas feels like it has been on just such a ride
4
Strong men and women are challenged by adversity. I believe
Texans have proven that
There may be a few more bumps and
bruises ahead. But make no mistake, Texas is back in the saddle
again.
State unemployment has dipped to its lowest level in four
years, signaling the diversification of the Texas economy. In
1970, the energy sector accounted for nearly 25 percent of state
output. Last year, it accounted for only 11.4 percent. And yet
Texas has more than regained the 208,000 jobs it lost from 1986
to 1987, with employment in plastics, aviation, electronics,
space and computer programming leading the way. More people are
at work in Texas today than ever before. The Dallas-Fort Worth
"Metroplex" leads in defense and aviation technology; Houston in
space and biomedical research; Austin, in microelectronics.
Another sign that Texas is becoming a world center of
technology is the selection of Ellis County as the site of the
Superconducting Super Collider
When built, the SSC will
enable us to study elemental particles with names like quarks,
mesons (May-sahns) and neutrinos. ((Sounds to me like the
breakfast cereal the Bush grandkids have been eating. ))
Well, as Tom Luce, chairman of the Texas National Research
Laboratory Commission said, with a little imagination, you can:
5
"conclude that future research in the field of high energy could
some day help us conquer cancer. " Or discover a way to boost the
amount of information on a microchip. Or answer questions that
eluded Einstein, giving us a glimpse of the forces that bind the
universe together. The SSC is a key to understanding nature, and
to developing the technologies and industries of the 21st
Century. Let me assure you, I will back the construction of the
SSC because, it is good for America
And let me also salute you, the members of the Texas House
and Senate, and the voters of this state, for having the vision
to take an early lead on this project
still, no matter how diversified and high-tech Texas
becomes, a strong domestic energy industry is important to the
future of this state and all of America. I find it disturbing
that nearly 50 percent of America's oil is imported. This is not
good for our national security.
Some are questioning the future of America's energy
production in the aftermath of the wreck of the Exxon Valdez off
Alaska. I am as concerned as you -- and all Americans -- are by
the environmental tragedy in Prince William Sound. We are using
federal resources intelligently in the clean-up effort. We are
working with industry to develop an improved plan in event of a
future spill. But shutting down our domestic energy production
6
is no answer, and would merely increase our dependence on foreign
oil. We must, and we will, maintain a strong, domestic energy
industry.
To reduce our dependence on foreign oil, we must return to
high levels of exploratory drilling. I propose to stimulate
domestic drilling with tax credits and other incentives. We need
more research to learn how to recover more secondary and tertiary
oil. And I want to do something else. Texas has a 65-year
supply of one of the cleanest forms of energy known to man --
natural gas. I call on Congress, at long last, to fully
decontrol natural gas
I believe that this will happen
soon.
We need a national energy policy that relies not only on
oil, but on many other sources. I believe we can and must use
more safe nuclear power. I believe that coal has a bright
future. You know my confidence in natural gas.
As we all become increasingly concerned about the need for
clean air, we must look more to natural gas and to nuclear power.
We must produce more of our corn crop to produce ethanol, more of
our natural gas to produce methanol
Greater use of these
two will rapidly improve the air quality of our most heavily
polluted cities.
7
I know there are still a few dark clouds remaining on our
economic horizon. I know that you are concerned about the
continuing crisis in many savings and loan institutions. I have
asked for measures to restore these institutions to financial
health. And I have asked for $37 million in 1989 funds for the
Justice Department, so that those who willfully abuse the trust
of small savers can expect to be pursued, and put in prison
The U.S. Senate has acted expeditiously on the S & L bill, with
strong support from Democrats and Republicans alike. I call on
the House of Representatives to pass a responsible S & L bill as
soon as possible.
Texas, like all of America, faces many challenges. But I
believe that by working together, as Republicans and Democrats,
as federal and as state officials, we can lick any problems down
the path. Federalism works because of your leadership and your
initiative. The old dictum of the best government being that
which is closest to the people applies here, in Austin. ( (You
know, Ann Richards was right about that silver foot. I kept
putting it in my mouth all along. But the bottom line is, when
they ask "Where's George?"
say he's in Austin, and damned
proud to be back
))
True, some problems of the recent past linger. Some areas
of the state are recovering more slowly than others. But the way
is clear to a future as bright and promising as the blue Texas
8
sky -- a new reliance on a diversified economy, and the
technologies of the next century. This is the secret of the
Texas turnaround, and its unfolding is a tribute to the
leadership of Bill Clements, Senators Gramm and Bentsen, and the
men and women of the Texas Legislature
Texas is starting
to feel like its old self again. There is again a feeling among
Texans that anything is possible -- who knows, the Rangers or the
Astros might even win the World Series
As we face our future in the White House, Barbara and I take
with us memories of people and places from a state that has been
home for most of our lives.
We remember driving the kids across Texas, and slowing down
so we could take in the fields of bluebonnets and Indian
paintbrush.
We remember the people of Houston, many of them mature and
skeptical, but who nonetheless listened to a green young man and
sent him to Congress.
And I remember Lyndon Johnson at his ranch back in 1969, an
elder Democrat giving neighborly advice to a young Republican,
while his very special Lady Bird held out her hand in
hospitality.
9
Barbara and I treasure these 41 years as Texans -- the
sights and sounds of half a lifetime, the trust of many friends,
and the love of a family. All this and more, we remember
whenever we think of home
Let me thank you for inviting us back to Austin. God bless
you. And God bless the United States of America.
#
#
#
Services of Mead Data Central
2ND DOCUI
said small recently gestnes as last walopkie speciat
went "as only Rep to so to Andrews as
way-"
80 a long
Remarks t
you can see that in Custn
speech- -
unt not at mean -b
spaned w/o A.R. silier -
LENGTH: 2111 words
Thank you very, very mus
USISTENT on LBJ
for presenting me to thi
respects and thanks to !
birthday. [Laughter] I'm not sure another plaio day in LITE
in order. But a belated happy birthday, anyway.
I'm delighted to be back in Austin with so many friends. And I'll want to
discuss a few issues facing Texas and all of America. But let me just say a few
words about what it means to be a Texan. My credentials: I have my driver's
license here, and I have my Texas hunting license here, and somewhere my voter
registration slip. And it is true, I like Kennebunkport, but I am a Texan. And
50, I just want to clear the air and say a few words about that.
You know, like the former kingdom of Hawaii, Texas is a nation that had to
reconcile itself to being a State. But like Hawaii, we'll never reconcile
ourselves to being ordinary. From the Pecos to the Pedernales, from the Rio
Grande to the Red River, there is no place on Earth like Texas, nor is there
another capitol in America quite like this one, built of this rose-tinged
granite that blushes in the low sun. And this being Texas, we had to build a
capitol that is exactly one foot taller than the one in Washington. And so, I
hope it's not too much of a cliche to say that Texas stands tall in the heart of
this President.
Perhaps for this reason, Larry McMurtry, who was at the White House the other
day -- he's one of my favorite writers -- in "Lonesome Dove" he describes the
mythic Texas and conjures that sense of the place we all know so well. And I'm
inspired by a man of letters who can convincingly adopt the voice of the cowboys
and the outlaws, men whose only schooling was in dodging bullets, whose only
lessons were in how to run or rustle cattle.
But unlike Davy Crockett, I first set out for Texas not on horseback from
Tennessee but from Connecticut in a red Studebaker in June of 1948. And more
than 40 years later, that trip is still a vivid memory: Highway 80, neon Pearl
Beer signs appearing in the desert twilight and see, I've got a note here --
and stopping at a cafe ---- I'll admit it I didn't know if chicken-fried steak was
a chicken fried like a steak or a steak that tasted like a chicken, but I've
learned. [Laughter] And still, Bar and I settled in Texas, as did many before us.
We raised 5 kids and helped get into the business world -- helped start a
business. And in that span of 40 years, I've watched with pride as this State
has grown into even greater glory. And in my lifetime, I've seen the oil wealth
of west Texas help finance the building of great cities, the expansion of great
universities and colleges --- the origins of a Texas Renaissance, if you will.
The energy business helped make Texas what it is today: the Third Coast of the
United States.
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Services of Mead Data Central
PAGE
3
25 Weekly Comp. Pres. Doc. 620
This Texas Renaissance lasted for years, even decades. But you also know
another more recent chapter of the Texas story: oil cheaper than some of this
fancy mineral water, skylines of sometimes empty buildings, expensive homes to
be had just for the monthly payments, and thousands of laid-off workers. Now,
I'm no cowboy. I pitch horseshoes for a living, but I don't ride these broncos.
I understand, though, that cowboys have a term for the most dangerous and
cunning bronco of all. And they call it a sunfisher. And those broncos will
rebel against a rider by adopting a motion not unlike the sunfish: a full-force
leap into the air, back arched high, flank twisting the rider to the left, head
and upper torso twisting the rider to the right in an attempt to tear him apart.
And let me suggest that not 50 many months ago, the whole State of Texas, our
State, felt like it had been on just such a ride. But strong men and women are
challenged by adversity, and I believe Texas has proven that. And there may be
a few more bumps and bruises ahead, but make no mistake: Texas is back - back
in the saddle, strong in every way.
State unemployment has dipped to its lowest level in 4 years, signaling, I
think, the diversification of the Texas economy. In 1970 the energy sector
accounted for nearly 25 percent of State output -- 25 percent. And last year it
accounted for 11.4 percent. And yet Texas has more than regained the 208,000
jobs it lost from 1986 to 1987, with employment in plastics and aviation,
electronics, space, and computer programming leading the way. More people are
at work in Texas today than ever before in our history. And the Dallas-Fort
Worth Metroplex leads in defense and aviation and technology; Houston in space
and biomedical research; Austin, microelectronics. Another sign that Texas is
becoming a world center of technology is the selection of Ellis County as the
site of the Superconducting Supercollidor. And when built, the SSC will enable
us to study elemental particles with names like quarks and mesons and neutrinos
-- sounds like a breakfast cereal that these grandkids of ours are into these
days.
But as Tom Luce, chairman of the Texas National Research Laboratory
Commission said, "With a little imagination, you can conclude that future
research in the field of high energy could some day help us conquer canceror
discover a way to boost the amount of information on a microchip or answer
questions that eluded Einstein, giving us a glimpse of the forces that bind the
universe together." The SSC is a key to understanding nature and to developing
the technologies and industries of the 21st century. Let me assure you: I will
back the construction of the SSC because it is good for the entire United States
of America. And let me also salute you, the members of the Texas House and
Senate, and the voters of this State for having the vision to take an early lead
on this project. Texas got its act together and made an outstanding
presentation early on.
Still, no matter how diversified and high tech that we become, a strong
domestic energy industry is important, still important, to the future of this
State and, in my view, to the future of all America. I find it disturbing that
nearly 50 percent of America's oil is imported. This is not good for the
national security of the United States of America. And now some are questioning
the future of America's energy production in the aftermath of the wreck of the
Exxon Valdez off Alaska. I am as concerned as anyone, as all Americans are, by
the environmental tragedy in Prince William Sound. We're using Federal
resources intelligently to clean it up. We're working with industry to develop
an improved plan in the event of a future spill. But shutting down our domestic
energy production is no answer and would merely increase our dependence on
LEXIS® NEXIS® LEXIS® NEXIS®
Services of Mead Data Central
PAGE
4
25 Weekly Comp. Pres. Doc. 620
foreign oil. We must, and we will maintain a strong, domestic energy industry.
To reduce our dependence on foreign oil, we must return to high levels of
exploratory drilling. I propose to stimulate domestic drilling with tax credits
and other incentives. We need more research --- this isn't just a function of
the Government, incidentally - but we need more research to learn how to
recover more of our secondary and tertiary oil. And I want to do something
else. Texas has a 65-year supply of one of the cleanest forms of energy known
to man: natural gas. And I call on the United States Congress, at long last, to
fully decontrol natural gas. And I believe that's going to happen soon.
We need a national energy policy that relies not only on oil but on other
sources as well. I believe we can and must use safe nuclear power. I believe
that coal has a bright future. And you know my confidence in natural gas. As
we all become increasingly concerned about the need for clean air, we must look
more to natural gas and to nuclear power. We must press forward with clean coal
technology, and we must produce more of our corn crop to produce switch more
of our corn crop to produce ethanol, more of our natural gas to produce
methanol. And the greater use of these alternative fuels will rapidly improve
the air quality of our most heavily polluted cities. And I'm talking about Los
Angeles, Denver. I'm talking about Houston, Texas, and other heavily impacted
areas.
I know there are still a few dark clouds remaining on our economic horizon.
I know that you're concerned about the continuing crisis in many of the savings
and loan institutions. And I've asked for measures to restore these
institutions to financial health. And I've asked for $37 million in 1989 funds
for the Justice Department so that those who willfully abuse the trust of the
small savers can expect to be pursued; tried; and, if guilty, put into prison.
We must go after the white-collar criminal in this country as well as the
others. The United States Senate has acted expeditiously on the savings and
loan bill that I put forward -- strong support on both sides of the aisle,
Democrats and Republicans alike. And I now call on the House of Representatives
to pass a responsible savings and loan bill as soon as possible.
Texas, like all America, faces many challenges. But I believe that by
working together, as Republicans and Democrats, as Federal and as State
officials, we can lick any problems down the path. Federalism works.
Federalism works because of your leadership and your initiative. The old dictum
of the best government being that which is closest to the people applies here,
right here in this chamber, right here in Austin, Texas, right here at the
capitol. True, some problems of the recent past linger on. Some areas of the
State are recovering more slowly than others. But the way is clear to a future
as bright and promising as the blue Texas sky: a new reliance on a diversified
economy and the technologies of the next century. And this is the secret of the
Texas turnaround, and its unfolding is a tribute not just to the entrepreneurial
spirit of Texans themselves but to the leadership of Governor Clements, Senators
Gramm and Bentsen, the congressional delegation, and the men and women of the
Texas legislature. Texas is starting to feel now that anything is possible.
I'm not standing here trying to underestimate the problems of education or
health or urban blight, but there is a new feeling abroad. Who knows, the
Astros might win in the National Leaque, and, yes, under enlightened new
leadership [laughter] -- the Texas Rangers might even win in the American
League. Good luck.
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5
25 Weekly Comp. Pres. Doc. 620
Seriously, as we face our future in the White House, Barbara and I take with
us memories of people and places from a State that has been home for most of our
lives -- all of my adult life, if you will. We remember those 12 years in west
Texas. It's a dry heat. You don't even feel it. [Laughter] My eye. We were
there for 12 years. But the people --- I feel their strength and fierce
independence to this very day. And I remember driving the kids across Texas.
We moved down from west Texas down to the Gulf Coast, slowing down to take in
the fields of the bluebonnets and Indian paintbrush. I don't think you can
drive through that country without thinking of yourself as a naturalist or an
environmentalist, or at least counting your blessings. And I remember the
people of Houston, many of them mature and skeptical, but who nonetheless
listened to a very green young man and sent him to Congress in 1966. And I
remember Lyndon Johnson at his ranch back in 1969, when I went over there - an
elder Democrat, retired from the Presidency, giving neighborly advice to a young
Republican, while his very special Lady Bird held out her hand in hospitality.
Barbara and I treasure these 41 years as Texans -- the sights and sounds of
our adult lifetime, the trust of many friends, and the love of a family. And
all this and more, we remember when we think of home.
You know, I've been thinking about it. Ann Richards was right. [Laughter]
Why do you think that I said we could cancer conquer?[Laughter] Look, I kept
putting that silver foot in my mouth --- [laughter] - all along the way. But
the bottom line is: When they ask, Where's George?, say he's in Austin, among
friends. And I'm very proud to be back.
Thank you all. God bless you. And God bless the United States of America.
Note: The President spoke at 4:35 p.m. in the house chamber of the State
us a soolid -LBT
capitol. He was introduced by Gib Lewis, speaker of the house of
representatives. At the conclusion of his remarks, the President referred
con the ther pines
State treasurer Ann Richards.
only Rep to to so to
Ferioning
ata at - a insisTEnT on BiPARTISAn/ AGAIN ReAching Ctotnis. Andrews out
feer Lastly pitze, Dem. and
- Just lAst week, Hie he ReminDeD OF kindness A speech-
Ats
WRITERS meeting that small Gestorez Go A 10mg way.
are
- Hunor, which came strapt from Pus. -
was self- depressating In that his same
spirit. But he Also sot point
LEXIS® NEXIS® LEXIS® NEXIS
REMARKS: TEXAS STATE LEGISLATURE
CAPITOL, AUSTIN
APRIL 26, WED., 4:40 P.M.
((IT's A GOOD THING THIS ISN'T BILL CLEMENTS'
BIRTHDAY
FROM WHERE I'M STANDING, ANOTHER PLAID
DAY IN THE TEXAS LEGISLATURE COULD BLIND A FELLA.))
- 2 -
IN ALL SINCERITY, HAPPY BELATED BIRTHDAY BILL
LIEUTENANT GOVERNOR BILL HoBBy, IT'S GREAT To SEE YOU
AGAIN. SPEAKER GIB LEWIS, DISTINGUISHED LEGISLATORS,
FELLOW TEXANS, THANK YOU
I'M DELIGHTED TO BE BACK
...
IN AUSTIN, WITH so MANY FRIENDS
I WILL WANT TO DISCUSS A FEW ISSUES FACING TEXAS
AND ALL OF AMERICA. AGRICULTURE COMMISSIONER
HIGHTOWER'S VIEWS TO THE CONTRARY, I AM A TEXAN.
- 3 -
So LET US SAY A FEW WORDS ABOUT WHAT IT MEANS TO BE A
TEXAN.
LIKE THE FORMER KINGDOM OF HAWAII, TEXAS IS A
NATION THAT HAD TO RECONCILE ITSELF TO BEING A STATE.
BUT, LIKE HAWAII, WE WILL NEVER RECONCILE OURSELVES TO
BEING ORDINARY. FROM THE PECOS TO THE PEDERNALES, FROM
THE RAPIDS OF THE RIO GRANDE TO THE BROAD EXPANSE OF
THE MUDDY RED RIVER, THERE IS NO PLACE ON EARTH LIKE
TEXAS
- 4 -
NOR IS THERE ANOTHER CAPITOL IN AMERICA QUITE LIKE
THIS ONE, BUILT OF A ROSE-TINGED GRANITE THAT BLUSHES
IN A LOW SUN. AND, THIS BEING TEXAS, WE HAD TO BUILD A
CAPITOL THAT IS EXACTLY ONE FOOT TALLER THAN THE ONE IN
WASHINGTON. TEXAS CERTAINLY STANDS TALL IN THE HEART
OF THIS PRESIDENT
PERHAPS FOR THIS REASON, LARRY MCMURTRY IS ONE OF
MY FAVORITE WRITERS.
- 5 -
IN LONESOME DOVE, HE DESCRIBES THE MYTHIC TEXAS, AND
CONJURES THAT SENSE OF PLACE WE ALL KNOW SO WELL. I AM
INSPIRED BY A MAN OF LETTERS WHO CAN CONVINCINGLY ADOPT
THE VOICE OF COWBOYS AND OUTLAWS -- MEN WHOSE ONLY
SCHOOLING WAS IN DODGING BULLETS, WHOSE ONLY LESSONS
WERE IN HOW TO RUN OR RUSTLE CATTLE.
BUT, UNLIKE DAVY CROCKETT, I FIRST SET OUT FOR
TEXAS NOT ON HORSEBACK FROM TENNESSEE, BUT FROM
CONNECTICUT IN A RED STUDEBAKER IN JUNE, 1948.
- 6 -
MORE THAN FORTY YEARS LATER, THAT TRIP IS STILL A VIVID
MEMORY -- HIGHWAY 80, A NEON PEARL BEER SIGN APPEARING
IN THE DESERT TWILIGHT LIKE AN APPARITION. STOPPING AT
A CAFE, I DIDN'T KNOW IF A CHICKEN FRIED STEAK WAS A
CHICKEN FRIED LIKE A STEAK, OR A STEAK THAT TASTED LIKE
CHICKEN
STILL, BARBARA AND I SETTLED IN TEXAS, AS DID so
MANY BEFORE US. WE RAISED FIVE CHILDREN, HELPED BUILD
A BUSINESS.
- 7 -
AND IN THAT SPAN OF FORTY YEARS, I WATCHED THIS STATE
GROW INTO EVEN GREATER GLORY. IN MY LIFETIME I HAVE
SEEN THE OIL WEALTH OF WEST TEXAS HELP FINANCE THE
BUILDING OF GREAT CITIES, AND THE EXPANSION OF FIRST-
CLASS LAND GRANT COLLEGES -- THE ORIGINS OF A TEXAS
RENAISSANCE, IF YOU WILL. THE ENERGY BUSINESS HELPED
MAKE TEXAS WHAT IT IS TODAY -- THE THIRD COAST OF THE
UNITED STATES
- 8 -
THIS TEXAS RENAISSANCE LASTED FOR YEARS, EVEN
DECADES. BUT YOU ALSO KNOW ANOTHER MORE RECENT CHAPTER
OF THE TEXAS STORY -- OIL CHEAPER THAN FANCY MINERAL
WATER, SKYLINES OF EMPTY BUILDINGS, EXPENSIVE HOMES TO
BE HAD FOR MONTHLY PAYMENTS, AND THOUSANDS OF LAID-OFF
WORKERS.
Now, I'M NO COWBOY. I PITCH HORSESHOES, BUT I
DON'T RIDE BRONCOS.
- 9 -
BUT I UNDERSTAND THAT COWBOYS HAVE A TERM FOR THE MOST
DANGEROUS AND CUNNING BRONCO OF ALL: THEY CALL IT A
"SUNFISHER." THESE BRONCOS WILL REBEL AGAINST A RIDER
BY ADOPTING A MOTION NOT UNLIKE THE SUNFISH OF THE GULF
-- A FULL-FORCE LEAP INTO THE AIR, BACK ARCHED HIGH,
FLANK TWISTING THE RIDER TO THE LEFT, HEAD AND UPPER
TORSO TWISTING THE RIDER TO THE RIGHT, IN AN ATTEMPT TO
TEAR HIM APART.
- 10 -
LET ME SUGGEST THAT IN THE LAST FEW YEARS, THE WHOLE
STATE OF TEXAS FEELS LIKE IT HAS BEEN ON JUST SUCH A
RIDE
STRONG MEN AND WOMEN ARE CHALLENGED BY ADVERSITY.
I BELIEVE TEXANS HAVE PROVEN THAT
THERE MAY BE A
FEW MORE BUMPS AND BRUISES AHEAD. BUT MAKE NO MISTAKE,
TEXAS IS BACK IN THE SADDLE AGAIN.
- 11 -
STATE UNEMPLOYMENT HAS DIPPED TO ITS LOWEST LEVEL
IN FOUR YEARS, SIGNALING THE DIVERSIFICATION OF THE
TEXAS ECONOMY. IN 1970, THE ENERGY SECTOR ACCOUNTED
FOR NEARLY 25 PERCENT OF STATE OUTPUT. LAST YEAR, IT
ACCOUNTED FOR ONLY 11.4 PERCENT. AND YET TEXAS HAS
MORE THAN REGAINED THE 208,000 JOBS IT LOST FROM 1986
TO 1987, WITH EMPLOYMENT IN PLASTICS, AVIATION,
ELECTRONICS, SPACE AND COMPUTER PROGRAMMING LEADING THE
WAY.
- 12 -
MORE PEOPLE ARE AT WORK IN TEXAS TODAY THAN EVER
BEFORE. THE DALLAS-FORT WORTH "METROPLEX" LEADS IN
DEFENSE AND AVIATION TECHNOLOGY; HOUSTON IN SPACE AND
BIOMEDICAL RESEARCH; AUSTIN, IN MICROELECTRONICS.
ANOTHER SIGN THAT TEXAS IS BECOMING A WORLD CENTER
OF TECHNOLOGY IS THE SELECTION OF ELLIS COUNTY AS THE
SITE OF THE SUPERCONDUCTING SUPER COLLIDER
- 13 -
WHEN BUILT, THE SSC WILL ENABLE US TO STUDY ELEMENTAL
PARTICLES WITH NAMES LIKE QUARKS, MESONS (MAY-SAHNS)
AND NEUTRINOS. ((SOUNDS TO ME LIKE THE BREAKFAST
CEREAL THE BUSH GRANDKIDS HAVE BEEN EATING.))
WELL, AS ToM LUCE, CHAIRMAN OF THE TEXAS NATIONAL
RESEARCH LABORATORY COMMISSION SAID, WITH A LITTLE
IMAGINATION, YOU CAN: "CONCLUDE THAT FUTURE RESEARCH IN
THE FIELD OF HIGH ENERGY COULD SOME DAY HELP US CONQUER
CANCER."
- 14 -
OR DISCOVER A WAY TO BOOST THE AMOUNT OF INFORMATION ON
A MICROCHIP. OR ANSWER QUESTIONS THAT ELUDED EINSTEIN,
GIVING US A GLIMPSE OF THE FORCES THAT BIND THE
UNIVERSE TOGETHER. THE SSC IS A KEY TO UNDERSTANDING
NATURE, AND TO DEVELOPING THE TECHNOLOGIES AND
INDUSTRIES OF THE 21st CENTURY. LET ME ASSURE YOU, I
WILL BACK THE CONSTRUCTION OF THE SSC BECAUSE IT IS
GOOD FOR AMERICA
- 15 -
AND LET ME ALSO SALUTE YOU, THE MEMBERS OF THE
TEXAS HOUSE AND SENATE, AND THE VOTERS OF THIS STATE,
FOR HAVING THE VISION TO TAKE AN EARLY LEAD ON THIS
PROJECT
STILL, NO MATTER HOW DIVERSIFIED AND HIGH-TECH
TEXAS BECOMES, A STRONG DOMESTIC ENERGY INDUSTRY IS
IMPORTANT TO THE FUTURE OF THIS STATE AND ALL OF
AMERICA. I FIND IT DISTURBING THAT NEARLY 50 PERCENT
OF AMERICA'S OIL IS IMPORTED.
- 16 -
THIS IS NOT GOOD FOR OUR NATIONAL SECURITY.
SOME ARE QUESTIONING THE FUTURE OF AMERICA'S ENERGY
PRODUCTION IN THE AFTERMATH OF THE WRECK OF THE Exxon
VALDEZ OFF ALASKA. I AM AS CONCERNED AS YOU -- AND ALL
AMERICANS -- ARE BY THE ENVIRONMENTAL TRAGEDY IN PRINCE
WILLIAM SOUND. WE ARE USING FEDERAL RESOURCES
INTELLIGENTLY IN THE CLEAN-UP EFFORT. WE ARE WORKING
WITH INDUSTRY TO DEVELOP AN IMPROVED PLAN IN EVENT OF A
FUTURE SPILL.
- 17 -
BUT SHUTTING DOWN OUR DOMESTIC ENERGY PRODUCTION IS NO
ANSWER, AND WOULD MERELY INCREASE OUR DEPENDENCE ON
FOREIGN OIL. WE MUST, AND WE WILL, MAINTAIN A STRONG,
DOMESTIC ENERGY INDUSTRY.
To REDUCE OUR DEPENDENCE ON FOREIGN OIL, WE MUST
RETURN TO HIGH LEVELS OF EXPLORATORY DRILLING. I
PROPOSE TO STIMULATE DOMESTIC DRILLING WITH TAX CREDITS
AND OTHER INCENTIVES. WE NEED MORE RESEARCH TO LEARN
HOW TO RECOVER MORE SECONDARY AND TERTIARY OIL.
- 18 -
AND I WANT TO DO SOMETHING ELSE. TEXAS HAS A 65-YEAR
SUPPLY OF ONE OF THE CLEANEST FORMS OF ENERGY KNOWN TO
MAN -- NATURAL GAS. I CALL ON CONGRESS, AT LONG LAST,
TO FULLY DECONTROL NATURAL GAS
I BELIEVE THAT
THIS WILL HAPPEN SOON.
WE NEED A NATIONAL ENERGY POLICY THAT RELIES NOT
ONLY ON OIL, BUT ON MANY OTHER SOURCES. I BELIEVE WE
CAN AND MUST USE MORE SAFE NUCLEAR POWER.
- 19 -
I BELIEVE THAT COAL HAS A BRIGHT FUTURE. You KNOW MY
CONFIDENCE IN NATURAL GAS.
As WE ALL BECOME INCREASINGLY CONCERNED ABOUT THE
NEED FOR CLEAN AIR, WE MUST LOOK MORE TO NATURAL GAS
AND TO NUCLEAR POWER. WE MUST PRODUCE MORE OF OUR CORN
CROP TO PRODUCE ETHANOL, MORE OF OUR NATURAL GAS TO
PRODUCE METHANOL
GREATER USE OF THESE TWO WILL
RAPIDLY IMPROVE THE AIR QUALITY OF OUR MOST HEAVILY
POLLUTED CITIES.
- 20 -
I KNOW THERE ARE STILL A FEW DARK CLOUDS REMAINING
ON OUR ECONOMIC HORIZON. I KNOW THAT YOU ARE CONCERNED
ABOUT THE CONTINUING CRISIS IN MANY SAVINGS AND LOAN
INSTITUTIONS. I HAVE ASKED FOR MEASURES TO RESTORE
THESE INSTITUTIONS TO FINANCIAL HEALTH. AND I HAVE
ASKED FOR $37 MILLION IN 1989 FUNDS FOR THE JUSTICE
DEPARTMENT, SO THAT THOSE WHO WILLFULLY ABUSE THE TRUST
OF SMALL SAVERS CAN EXPECT TO BE PURSUED, AND PUT IN
PRISON
- 21 -
THE U.S. SENATE HAS ACTED EXPEDITIOUSLY ON THE S & L
BILL, WITH STRONG SUPPORT FROM DEMOCRATS AND
REPUBLICANS ALIKE. I CALL ON THE HOUSE OF
REPRESENTATIVES TO PASS A RESPONSIBLE S & L BILL AS
SOON AS POSSIBLE.
TEXAS, LIKE ALL OF AMERICA, FACES MANY CHALLENGES.
BUT I BELIEVE THAT BY WORKING TOGETHER, AS REPUBLICANS
AND DEMOCRATS, AS FEDERAL AND AS STATE OFFICIALS, WE
CAN LICK ANY PROBLEMS DOWN THE PATH.
- 22 -
FEDERALISM WORKS BECAUSE OF YOUR LEADERSHIP AND YOUR
INITIATIVE. THE OLD DICTUM OF THE BEST GOVERNMENT
BEING THAT WHICH IS CLOSEST TO THE PEOPLE APPLIES HERE,
IN AUSTIN. ((You KNOW, ANN RICHARDS WAS RIGHT ABOUT
THAT SILVER FOOT. I KEPT PUTTING IT IN MY MOUTH ALL
ALONG. BUT THE BOTTOM LINE IS, WHEN THEY ASK "WHERE'S
GEORGE?"
...
SAY HE'S IN AUSTIN, AND DAMNED PROUD TO
BE BACK .))
- 23 -
TRUE, SOME PROBLEMS OF THE RECENT PAST LINGER.
SOME AREAS OF THE STATE ARE RECOVERING MORE SLOWLY THAN
OTHERS. BUT THE WAY IS CLEAR TO A FUTURE AS BRIGHT AND
PROMISING AS THE BLUE TEXAS SKY -- A NEW RELIANCE ON A
DIVERSIFIED ECONOMY, AND THE TECHNOLOGIES OF THE NEXT
CENTURY. THIS IS THE SECRET OF THE TEXAS TURNAROUND,
AND ITS UNFOLDING IS A TRIBUTE TO THE LEADERSHIP OF
BILL CLEMENTS, SENATORS GRAMM AND BENTSEN, AND THE MEN
AND WOMEN OF THE TEXAS LEGISLATURE
- 24 -
TEXAS IS STARTING TO FEEL LIKE ITS OLD SELF AGAIN.
THERE IS AGAIN A FEELING AMONG TEXANS THAT ANYTHING IS
POSSIBLE -- WHO KNOWS, THE RANGERS OR THE ASTROS MIGHT
EVEN WIN THE WORLD SERIES
As WE FACE OUR FUTURE IN THE WHITE HOUSE, BARBARA
AND I TAKE WITH US MEMORIES OF PEOPLE AND PLACES FROM A
STATE THAT HAS BEEN HOME FOR MOST OF OUR LIVES.
- 25 -
WE REMEMBER DRIVING THE KIDS ACROSS TEXAS, AND
SLOWING DOWN SO WE COULD TAKE IN THE FIELDS OF
BLUEBONNETS AND INDIAN PAINTBRUSH.
WE REMEMBER THE PEOPLE OF HOUSTON, MANY OF THEM
MATURE AND SKEPTICAL, BUT WHO NONETHELESS LISTENED TO A
GREEN YOUNG MAN AND SENT HIM TO CONGRESS.
- 26 -
AND I REMEMBER LYNDON JOHNSON AT HIS RANCH BACK IN
1969, AN ELDER DEMOCRAT GIVING NEIGHBORLY ADVICE TO A
YOUNG REPUBLICAN, WHILE HIS VERY SPECIAL LADY BIRD HELD
OUT HER HAND IN HOSPITALITY.
BARBARA AND I TREASURE THESE 41 YEARS AS TEXANS --
THE SIGHTS AND SOUNDS OF HALF A LIFETIME, THE TRUST OF
MANY FRIENDS, AND THE LOVE OF A FAMILY. ALL THIS AND
MORE, WE REMEMBER WHENEVER WE THINK OF HOME
- 27 -
LET ME THANK YOU FOR INVITING US BACK To AUSTIN.
GOD BLESS YOU. AND GOD BLESS THE UNITED STATES OF
AMERICA.
#
#
#
- 2 -
IN ALL SINCERITY, HAPPY BELATED BIRTHDAY BILL
...
LIEUTENANT GOVERNOR BILL HoBBy, IT'S GREAT To SEE YOU
AGAIN. SPEAKER GIB LEWIS, DISTINGUISHED LEGISLATORS,
FELLOW TEXANS, THANK YOU
...
I'M DELIGHTED TO BE BACK
IN AUSTIN, WITH so MANY FRIENDS
...
I WILL WANT TO DISCUSS A FEW ISSUES FACING TEXAS
AND ALL OF AMERICA. [[AGRICULTURE COMMISSIONER
HIGHTOWER'S VIEWS TO THE CONTRARY, ]] I AM A TEXAN.
- 3 -
So LET US SAY A FEW WORDS ABOUT WHAT IT MEANS TO BE A
TEXAN.
LIKE THE FORMER KINGDOM OF HAWAII, TEXAS IS A
NATION THAT HAD TO RECONCILE ITSELF TO BEING A STATE.
BUT, LIKE HAWAII, WE WILL NEVER RECONCILE OURSELVES TO
BEING ORDINARY. FROM THE PECOS TO THE PEDERNALES, FROM
THE RAPIDS OF THE RIO GRANDE TO THE BROAD EXPANSE OF
THE MUDDY RED RIVER, THERE IS NO PLACE ON EARTH LIKE
TEXAS
M 4 .
NOR IS THERE ANOTHER CAPITOL IN AMERICA QUITE LIKE
THIS ONE, BUILT OF A ROSE-TINGED GRANITE THAT BLUSHES
IN A LOW SUN. AND, THIS BEING TEXAS, WE HAD TO BUILD A
CAPITOL THAT IS EXACTLY ONE FOOT TALLER THAN THE ONE IN
WASHINGTON. TEXAS CERTAINLY STANDS TALL IN THE HEART
OF THIS PRESIDENT
PERHAPS FOR THIS REASON, LARRY MCMURTRY IS ONE OF
MY FAVORITE WRITERS.
- 5 -
IN LONESOME DOVE, HE DESCRIBES THE MYTHIC TEXAS, AND
CONJURES THAT SENSE OF PLACE WE ALL KNOW S0 WELL. I AM
INSPIRED BY A MAN OF LETTERS WHO CAN CONVINCINGLY ADOPT
THE VOICE OF COWBOYS AND OUTLAWS -- MEN WHOSE ONLY
SCHOOLING WAS IN DODGING BULLETS, WHOSE ONLY LESSONS
WERE IN HOW TO RUN OR RUSTLE CATTLE.
BUT, UNLIKE DAVY CROCKETT, I FIRST SET OUT FOR
TEXAS NOT ON HORSEBACK FROM TENNESSEE, BUT FROM
CONNECTICUT IN A RED STUDEBAKER IN JUNE, 1948.
- 6 -
MORE THAN FORTY YEARS LATER, THAT TRIP IS STILL A VIVID
MEMORY -- HIGHWAY 80, A NEON PEARL BEER SIGN APPEARING
IN THE DESERT TWILIGHT LIKE AN APPARITION. STOPPING AT
A CAFE, I DIDN'T KNOW IF A CHICKEN FRIED STEAK WAS A
CHICKEN FRIED LIKE A STEAK, OR A STEAK THAT TASTED LIKE
CHICKEN
STILL, BARBARA AND I SETTLED IN TEXAS, AS DID so
MANY BEFORE US. WE RAISED FIVE CHILDREN, HELPED BUILD
A BUSINESS.
- 7 -
AND IN THAT SPAN OF FORTY YEARS, I WATCHED THIS STATE
GROW INTO EVEN GREATER GLORY. IN MY LIFETIME I HAVE
SEEN THE OIL WEALTH OF WEST TEXAS HELP FINANCE THE
BUILDING OF GREAT CITIES, AND THE EXPANSION OF FIRST-
CLASS LAND GRANT COLLEGES -- THE ORIGINS OF A TEXAS
RENAISSANCE, IF YOU WILL. THE ENERGY BUSINESS HELPED
MAKE TEXAS WHAT IT IS TODAY -- THE THIRD COAST OF THE
UNITED STATES
- 8 -
THIS TEXAS RENAISSANCE LASTED FOR YEARS, EVEN
DECADES. BUT YOU ALSO KNOW ANOTHER MORE RECENT CHAPTER
OF THE TEXAS STORY -- OIL CHEAPER THAN FANCY MINERAL
WATER, SKYLINES OF EMPTY BUILDINGS, EXPENSIVE HOMES TO
BE HAD FOR MONTHLY PAYMENTS, AND THOUSANDS OF LAID-OFF
WORKERS.
Now, I'M NO COWBOY. I PITCH HORSESHOES, BUT I
DON'T RIDE BRONCOS.
- 9 -
BUT I UNDERSTAND THAT COWBOYS HAVE A TERM FOR THE MOST
DANGEROUS AND CUNNING BRONCO OF ALL: THEY CALL IT A
"SUNFISHER." THESE BRONCOS WILL REBEL AGAINST A RIDER
BY ADOPTING A MOTION NOT UNLIKE THE SUNFISH OF THE GULF
-- A FULL-FORCE LEAP INTO THE AIR, BACK ARCHED HIGH,
FLANK TWISTING THE RIDER TO THE LEFT, HEAD AND UPPER
TORSO TWISTING THE RIDER TO THE RIGHT, IN AN ATTEMPT TO
TEAR HIM APART.
- 10 -
LET ME SUGGEST THAT IN THE LAST FEW YEARS, THE WHOLE
STATE OF TEXAS FEELS LIKE IT HAS BEEN ON JUST SUCH A
RIDE
STRONG MEN AND WOMEN ARE CHALLENGED BY ADVERSITY.
I BELIEVE TEXANS HAVE PROVEN THAT
THERE MAY BE A
FEW MORE BUMPS AND BRUISES AHEAD. BUT MAKE NO MISTAKE,
TEXAS IS BACK IN THE SADDLE AGAIN.
- 11 -
STATE UNEMPLOYMENT HAS DIPPED TO ITS LOWEST LEVEL
IN FOUR YEARS, SIGNALING THE DIVERSIFICATION OF THE
TEXAS ECONOMY. IN 1970, THE ENERGY SECTOR ACCOUNTED
FOR NEARLY 25 PERCENT OF STATE OUTPUT. LAST YEAR, IT
ACCOUNTED FOR ONLY 11.4 PERCENT. AND YET TEXAS HAS
MORE THAN REGAINED THE 208,000 JOBS IT LOST FROM 1986
TO 1987, WITH EMPLOYMENT IN PLASTICS, AVIATION,
ELECTRONICS, SPACE AND COMPUTER PROGRAMMING LEADING THE
WAY.
- 12 -
MORE PEOPLE ARE AT WORK IN TEXAS TODAY THAN EVER
BEFORE. THE DALLAS-FORT WORTH "METROPLEX" LEADS IN
DEFENSE AND AVIATION TECHNOLOGY; HOUSTON IN SPACE AND
BIOMEDICAL RESEARCH; AUSTIN, IN MICROELECTRONICS.
ANOTHER SIGN THAT TEXAS IS BECOMING A WORLD CENTER
OF TECHNOLOGY IS THE SELECTION OF ELLIS COUNTY AS THE
SITE OF THE SUPERCONDUCTING SUPER COLLIDER
- 13 -
WHEN BUILT, THE SSC WILL ENABLE US TO STUDY ELEMENTAL
PARTICLES WITH NAMES LIKE QUARKS, MESONS (MAY-SAHNS)
AND NEUTRINOS. ((SOUNDS TO ME LIKE THE BREAKFAST
CEREAL THE BUSH GRANDKIDS HAVE BEEN EATING.))
WELL, AS ToM LUCE, CHAIRMAN OF THE TEXAS NATIONAL
RESEARCH LABORATORY COMMISSION SAID, WITH A LITTLE
IMAGINATION, YOU CAN: "CONCLUDE THAT FUTURE RESEARCH IN
THE FIELD OF HIGH ENERGY COULD SOME DAY HELP US CONQUER
CANCER."
- 14 -
OR DISCOVER A WAY TO BOOST THE AMOUNT OF INFORMATION ON
A MICROCHIP. OR ANSWER QUESTIONS THAT ELUDED EINSTEIN,
GIVING US A GLIMPSE OF THE FORCES THAT BIND THE
UNIVERSE TOGETHER. THE SSC IS A KEY TO UNDERSTANDING
NATURE, AND TO DEVELOPING THE TECHNOLOGIES AND
INDUSTRIES OF THE 21st CENTURY. LET ME ASSURE YOU, I
WILL BACK THE CONSTRUCTION OF THE SSC BECAUSE IT IS
GOOD FOR AMERICA
- 15 -
AND LET ME ALSO SALUTE YOU, THE MEMBERS OF THE
TEXAS HOUSE AND SENATE, AND THE VOTERS OF THIS STATE,
FOR HAVING THE VISION TO TAKE AN EARLY LEAD ON THIS
PROJECT
STILL, NO MATTER HOW DIVERSIFIED AND HIGH-TECH
TEXAS BECOMES, A STRONG DOMESTIC ENERGY INDUSTRY IS
IMPORTANT TO THE FUTURE OF THIS STATE AND ALL OF
AMERICA. I FIND IT DISTURBING THAT NEARLY 50 PERCENT
OF AMERICA'S OIL IS IMPORTED.
- 16 -
THIS IS NOT GOOD FOR OUR NATIONAL SECURITY.
SOME ARE QUESTIONING THE FUTURE OF AMERICA'S ENERGY
PRODUCTION IN THE AFTERMATH OF THE WRECK OF THE Exxon
VALDEZ OFF ALASKA. I AM AS CONCERNED AS YOU -- AND ALL
AMERICANS -- ARE BY THE ENVIRONMENTAL TRAGEDY IN PRINCE
WILLIAM SOUND. WE ARE USING FEDERAL RESOURCES
INTELLIGENTLY IN THE CLEAN-UP EFFORT. WE ARE WORKING
WITH INDUSTRY TO DEVELOP AN IMPROVED PLAN IN EVENT OF A
FUTURE SPILL.
- 17 -
BUT SHUTTING DOWN OUR DOMESTIC ENERGY PRODUCTION IS NO
ANSWER, AND WOULD MERELY INCREASE OUR DEPENDENCE ON
FOREIGN OIL. WE MUST, AND WE WILL, MAINTAIN A STRONG,
DOMESTIC ENERGY INDUSTRY.
To REDUCE OUR DEPENDENCE ON FOREIGN OIL, WE MUST
RETURN TO HIGH LEVELS OF EXPLORATORY DRILLING. I
PROPOSE TO STIMULATE DOMESTIC DRILLING WITH TAX CREDITS
AND OTHER INCENTIVES. WE NEED MORE RESEARCH TO LEARN
HOW TO RECOVER MORE SECONDARY AND TERTIARY OIL.
- 18 -
AND I WANT TO DO SOMETHING ELSE. TEXAS HAS A 65-YEAR
SUPPLY OF ONE OF THE CLEANEST FORMS OF ENERGY KNOWN TO
MAN -- NATURAL GAS. I CALL ON CONGRESS, AT LONG LAST,
TO FULLY DECONTROL NATURAL GAS
I BELIEVE THAT
THIS WILL HAPPEN SOON.
WE NEED A NATIONAL ENERGY POLICY THAT RELIES NOT
ONLY ON OIL, BUT ON MANY OTHER SOURCES. I BELIEVE WE
CAN AND MUST USE MORE SAFE NUCLEAR POWER.
- 19 -
I BELIEVE THAT COAL HAS A BRIGHT FUTURE. You KNOW MY
CONFIDENCE IN NATURAL GAS.
As WE ALL BECOME INCREASINGLY CONCERNED ABOUT THE
NEED FOR CLEAN AIR, WE MUST LOOK MORE TO NATURAL GAS
AND TO NUCLEAR POWER. WE MUST PRODUCE MORE OF OUR CORN
CROP TO PRODUCE ETHANOL, MORE OF OUR NATURAL GAS TO
PRODUCE METHANOL
GREATER USE OF THESE TWO WILL
RAPIDLY IMPROVE THE AIR QUALITY OF OUR MOST HEAVILY
POLLUTED CITIES.
- 20 -
I KNOW THERE ARE STILL A FEW DARK CLOUDS REMAINING
ON OUR ECONOMIC HORIZON. I KNOW THAT YOU ARE CONCERNED
ABOUT THE CONTINUING CRISIS IN MANY SAVINGS AND LOAN
INSTITUTIONS. I HAVE ASKED FOR MEASURES TO RESTORE
THESE INSTITUTIONS TO FINANCIAL HEALTH. AND I HAVE
ASKED FOR $37 MILLION IN 1989 FUNDS FOR THE JUSTICE
DEPARTMENT, SO THAT THOSE WHO WILLFULLY ABUSE THE TRUST
OF SMALL SAVERS CAN EXPECT TO BE PURSUED, AND PUT IN
PRISON .
- 21 -
THE U.S. SENATE HAS ACTED EXPEDITIOUSLY ON THE S & L
BILL, WITH STRONG SUPPORT FROM DEMOCRATS AND
REPUBLICANS ALIKE. I CALL ON THE HOUSE OF
REPRESENTATIVES To PASS A RESPONSIBLE S & L BILL AS
SOON AS POSSIBLE.
TEXAS, LIKE ALL OF AMERICA, FACES MANY CHALLENGES.
BUT I BELIEVE THAT BY WORKING TOGETHER, AS REPUBLICANS
AND DEMOCRATS, AS FEDERAL AND AS STATE OFFICIALS, WE
CAN LICK ANY PROBLEMS DOWN THE PATH.
- 22 -
FEDERALISM WORKS BECAUSE OF YOUR LEADERSHIP AND YOUR
INITIATIVE. THE OLD DICTUM OF THE BEST GOVERNMENT
BEING THAT WHICH IS CLOSEST TO THE PEOPLE APPLIES HERE,
IN AUSTIN. ((You KNOW, ANN RICHARDS WAS RIGHT ABOUT
THAT SILVER FOOT. I KEPT PUTTING IT IN MY MOUTH ALL
ALONG. BUT THE BOTTOM LINE IS, WHEN THEY ASK "WHERE'S
GEORGE?"
...
SAY HE'S IN AUSTIN, AND DAMNED PROUD TO
BE BACK .))
- 23 -
TRUE, SOME PROBLEMS OF THE RECENT PAST LINGER.
SOME AREAS OF THE STATE ARE RECOVERING MORE SLOWLY THAN
OTHERS. BUT THE WAY IS CLEAR TO A FUTURE AS BRIGHT AND
PROMISING AS THE BLUE TEXAS SKY -- A NEW RELIANCE ON A
DIVERSIFIED ECONOMY, AND THE TECHNOLOGIES OF THE NEXT
CENTURY. THIS IS THE SECRET OF THE TEXAS TURNAROUND,
AND ITS UNFOLDING IS A TRIBUTE TO THE LEADERSHIP OF
BILL CLEMENTS, SENATORS GRAMM AND BENTSEN, AND THE MEN
AND WOMEN OF THE TEXAS LEGISLATURE
- 24 -
TEXAS IS STARTING TO FEEL LIKE ITS OLD SELF AGAIN.
THERE IS AGAIN A FEELING AMONG TEXANS THAT ANYTHING IS
POSSIBLE -- WHO KNOWS, THE RANGERS OR THE ASTROS MIGHT
EVEN WIN THE WORLD SERIES
As WE FACE OUR FUTURE IN THE WHITE HOUSE, BARBARA
AND I TAKE WITH US MEMORIES OF PEOPLE AND PLACES FROM A
STATE THAT HAS BEEN HOME FOR MOST OF OUR LIVES.
- 25 -
WE REMEMBER DRIVING THE KIDS ACROSS TEXAS, AND
SLOWING DOWN so WE COULD TAKE IN THE FIELDS OF
BLUEBONNETS AND INDIAN PAINTBRUSH.
WE REMEMBER THE PEOPLE OF HOUSTON, MANY OF THEM
MATURE AND SKEPTICAL, BUT WHO NONETHELESS LISTENED To A
GREEN YOUNG MAN AND SENT HIM TO CONGRESS.
- 26 -
AND I REMEMBER LYNDON JOHNSON AT HIS RANCH BACK IN
1969, AN ELDER DEMOCRAT GIVING NEIGHBORLY ADVICE TO A
YOUNG REPUBLICAN, WHILE HIS VERY SPECIAL LADY BIRD HELD
OUT HER HAND IN HOSPITALITY.
BARBARA AND I TREASURE THESE 41 YEARS AS TEXANS --
THE SIGHTS AND SOUNDS OF HALF A LIFETIME, THE TRUST OF
MANY FRIENDS, AND THE LOVE OF A FAMILY. ALL THIS AND
MORE, WE REMEMBER WHENEVER WE THINK OF HOME
- 27 -
LET ME THANK YOU FOR INVITING US BACK TO AUSTIN.
GOD BLESS YOU. AND GOD BLESS THE UNITED STATES OF
AMERICA.
#
#
#
Mark 4/25
5:15pm
REMARKS: TEXAS STATE LEGISLATURE
CAPITOL, AUSTIN
APRIL 26, WED., 4:40 P.M.
((IT's A GOOD THING THIS ISN'T BILL CLEMENTS'
BIRTHDAY ...
FROM WHERE I'M STANDING, ANOTHER PLAID
DAY IN THE TEXAS LEGISLATURE COULD BLIND A FELLA.))
14 A
The Ballas Morning Nelus
Thursday, April 27, 1989
HF
BUSH VISITS TEXAS
Ann Richards, others praise Bush speech
By Wayne Slater
barely a dozen feet from the presi-
Railroad Commissioner Kent
they liked it, they felt the presi-
and Sam Attlesey
dent, who after bobbling a line in
Hance said he liked what he heard
dent's message lacked substance.
Austin Bureau of The Dallas Morning News
his speech looked down and joked,
about energy.
"The only purpose was to make
AUSTIN - Their long-distance
"Maybe Ann Richards was right."
"It's the first time we've had a
Texas feel good about itself," said
political spat may have been a
For her part, Ms. Richards
president make a strong statement
Rep. Mike McKinney, D-Centerville.
highlight of the political season,
praised the president's address
about energy," the commissioner
"I think it did that. I don't think it
but on Wednesday, state Treasurer
Wednesday and had only kind
said. "He is not going to let Texas'
was of substance. I don't think it
words for him.
Ann Richards and President Bush
economy falter."
was intended to be."
were on their best behavior.
"He was cordial today, and I am
A recovering energy industry
Rep. Bruce Gibson, D-Cleburne,
Ms. Richards even wore her sil-
grateful for that," she said.
and additional developments in the
said the speech was "entertaining"
ver foot lapel pin, a gift from the
After Mr. Bush's 15-minute ad-
high-technology field are seen as
and "geared toward touching a lot
president.
dress, legislators, state officials and
two key factors in the economic sur-
of the emotional bases of Texas
"When a gentleman sends you
politicians who packed the ornate
vival of Texas, and legislators said
more than any new policy initia-
jewelry and he comes to town, you
House chamber gave the president
Mr. Bush properly stressed those
tives."
want to be sure and wear it," said
high marks, especially for the
points in painting a rosy picture for
Sen. Eddie Bernice Johnson, D-
Ms. Richards, who sat on the front
upbeat tone, talk of his Texas roots
the state.
Dallas, said the speech failed to ad-
row in the House chamber Wednes-
and his support for the Supercon-
"It was generally a very upbeat
dress some major issues, and she
day when Mr. Bush addressed legis-
ducting Super Collider and the en-
and optimistic tone," Mr. Hobby
disputed Mr. Bush's contention that
lators and state leaders.
ergy industry.
said.
"Texas is back in the saddle."
It was the first time the two had
House Speaker Gib Lewis and Lt.
"He was showing he's concerned
Gov. Bill Hobby, both Democrats,
and knows what our needs are,"
"It was a very light speech," she
been together since last summer's
said they were encouraged; by, the
said Rep. Tom Craddick, R-Midland,
added.
national political conventions,
a longtime friend of the president's.
And Rep. Curtis Seidlits, D-Sher-
when Ms. Richards lampooned Mr.
president's pledge to support fed-
eral funding for the atom smasher.
"I liked the upbeat positive atti-
man, echoed Ms. Johnson's senti-
Bush with the line: "Poor George.
tude," said Clayton Williams, a Mid-
ments.
He can't help it; he was born with a
"That's good news for us," Mr.
land oilman and likely GOP candi-
"It was a social visit," he said, "a
silver foot in his mouth," and Mr.
Lewis said.
date for governor.
tea-time social call."
Bush countered in his acceptance
"Without strong support from
While Republicans found no
Staff writers Ann: Marie Kilday
speech with a lighthearted jab.
the president, its chances for fund-
fault with the speech, some Demo-
and Siva Vaidhyan than contrib-
On Wednesday, Ms. Richards sat
ing are much less," Mr. Hobby said.
cratic lawmakers said that although
uted to this report.
Bush seeks advice from former boss Reagan
By Kevin Merida
was to the left in another cushioned
There wasia bit of strain on the
Washington Bureau of The Dallas Morning News
nia.
chair, clad in the familiar brown
faces of both men when Mr. Reagan
They have spoken by telephone a
LOS ANGELES Metaphorically
suit, his left hand on his knee. On
was asked about Oliver North and
fair amount, however, including
speaking, it was a meeting of the re-
the table beside him was what else?
new White House documents re-
when Mr. Bush called to apologize
tired quarterback and his backup,
A bowl of jelly beans.
leased during his trial docu-
for those newspaper stories in
who after eight years on the bench
How do you think your successor
ments that the congressional com-
which Bush aides were trashing
is finally calling the signals for the
is doing? Mr. Reagan was asked af
mittees investigating the
Mr. Reagan.
nation.
ter being told there was consider-
tra affair had never seen.
There was even a football rest-
able discussion of Mr Bushs first
To emphasize his high regard for
"Well, again, as I say, I just don't
ing comfortably under an end table
100 days.
his former boss, Mr. Bush told re-
think this is a time to comment,"
in Ronald Reagan's office, a room
Well, I'm not a part of that dis-
porters that he was there to seek
Mr. Reagan said.
with a view on the 34th floor of 2121
cussion," he responded, "because I
Mr. Reagan's advice.
The private meeting Wednesday
Fox Plaza.
think he's doing just fine. And he
morning, which lasted nearly an
On what?
The current president, George
wasa major part of everything that
re.
hour, was the first between the two
"Life its own self," M
Bush, took his seat in the middle of
Dan
we did in the preceding eight years.
men since Mr. Bush took office and
plied, quoting Texas
a tan couch. The former president
I'm Very pleased to have him here."
Mr. Reagan headed home to Califor-
Jenkins. "Life its ow'
Photo Copy Preservation
Bush talks
Back in home state
Texas before
Legislature
President says he thinks
economy's on rebound
By Kevin Merida
Washington Bureau of The Dallas Morning News
AUSTIN - On the first 2½ days of a cross-
country trip, President Bush mourned the sail-
ors killed on the USS Iowa, touted his anti-drug
program and extolled his plans to improve
American competitiveness.
But when he returned to his adopted home
state Wednesday, it was time to talk about Texas
Ann Richards, others praise speech.
14A
Bush meets with Reagan.
14A
- Texas culture, the Texas economy, Texas poli-
ticians, even his Texas roots.
In a personal, often-nostalgic 15-minute ad-
dress to the Legislature - the first time a presi-
dent has addressed Texas lawmakers since Lyn-
don B. Johnson spoke to the Senate in 1965 - Mr.
Bush offered a combination pep talk and rhap-
sodical history lesson.
Defining what it means to be a Texan, the
president evoked author Larry McMurtry's tales
of cowboys and outlaws, noted that the state Cap-
itol was built taller than the nation's Capitol and
recalled when he arrived in West Texas after
leaving Connecticut in his red Studebaker in
June 1948.
"Stopping at a cafe," Mr. Bush reflected, "I'll
admit it, I didn't know if a chicken-fried steak
was a chicken fried like a steak or a steak that
tasted like chicken."
The one-time Midland oilman even renewed
the old debate about his Texas credentials, assur-
ing lawmakers that he has a driver's license and
hunting license from the Lone Star State. Ac-
knowledging that he does have a home in Maine,
he said, "It's true I like Kennebunkport, but I am
a Texan."
The legislators and guests in the ornate
House chamber interrupted his speech 10 times
with warm and enthusiastic applause. Gov. Bill
Clements later presented Mr. Bush a certificate
making him an honorary captain in the Texas
Rangers, an award that last went to the late John
Wayne, and House Speaker Gib Lewis presented
Mr. Bush with a gavel.
Besides waxing nostalgic about Texas, Mr.
Bush also addressed the painful reality with
which many Texans have been grappling in re-
cent years: "oil cheaper than some fancy mineral
water. skylines of sometimes empty buildings,
The Dallas Morning News: David Woo
expensive homes to be had just for the monthly
President Bush addresses the Legisla-
dent had done so since Lyndon B.
Please see BUSH on Page 15A.
ture Wednesday, the first time a presi-
Johnson spoke to the Senate in 1965.
Photo Copy Preservation
Photo Copy Preservation
A-12 Thursday, April 27, 1989
543
Bush said his driver's license,
BUSH
hunting license and voter regis-
Bush adds
tration card are evidence that his
From A-1
heart is in Texas, even if his va-
cation home is in Maine. "I like
Kennebunkport," he said, "but I
his clout
der, skeptics have sought to de-
am a Texan."
rail the plan by convincing mem-
Asserting the Texas economy
b'ers of Congress from other
shows definite signs of recovery,
to collider
states to vote against financing it.
Bush said, "Make no misstate,
Bush's firm backing of the pro-
Texas is back - back in the sad-
ject drew immediate praise from
dle - strong in every way.
state officials.
By Dale Rice
"Without strong support from
"True, some problems of the
TIMES HERALD AUSTIN BUREAU
the president, its chances for
recent past linger," the president
funding are much less," said Lt.
said. "But the way is clear to a
AUSTIN - In his first major
Gov. Bill Hobby, the state's top-
future as bright and promising as
policy statement on the issue,
ranking Democrat.
the blue Texas sky - a new reli-
President George Bush on
"If we have the president's
ance on a diversified economy
Wednesday strongly endorsed
support, it's a great step for-
and the technologies of the next
construction of the superconduct-
ward," said State Treasurer Ann
century."
ing super collider slated to be
Richards, who gained national
To help speed the recovery,
built near Waxahachie.
fame last year when she deliv-
Bush said, he supports efforts to
Speaking to a joint session of
ered the keynote address at the
increase production of alternative
the Texas Legislature, Bush said
Democratic National Convention
fuels, including natural gas
the giant atom smasher holds
and said-Bush had been born
which is abundant in Texas. He
"the key to understanding nature
with a "silver foot in his mouth."
also said he was backing mea-
and to developing the technolo-
In a departure from his pre-
sures to restore financial integrity
gies and industries of the 21st
pared remarks, Bush referred to
to the troubled savings and loan
century."
Richards who sat in the front
industry, vowing that those who
"Let me assure you, I will back
row - and poked fun at the way
abused the trust of small savers
construction of the SSC because
he had jumbled words in his
could expect to be "pursued and
it is good for the entire United
speech. "You know," he said,
put in prison.
States of America," Bush told
"I've been thinking about it. Ann
lawmakers and state leaders who
While many lawmakers agreed
Richards was right. I kept put-
are fighting congressional criti-
the speech was long on nostalgia
ting that silver foot in my mouth
cism over the $5.9 billion cost of
and short on substance, Sen. Ted
the project.
all along the way."
That statement was one of
Lyon, D-Rockwall, said it "was
The president praised the
the right kind of speech for him
many that drew a warm and en-
state's lawmakers and voters for
to come back and make to the
thusiastic response from the
their commitment to the project,
Texas Legislature."
mostly Democratic lawmakers
saying, "Texas got its act together
and their guests who packed the
Rep. Pat Hill, R-Dallas, de-
and made an outstanding presen-
House chamber for the speech,
scribed it as a "feel-good speech,"
tation early on."
the first time in state history that
and Rep. Anita Hill, R-Garland,
Bush's comments represented
his first serious discussion of the
am sitting president addressed a
called it a "pep talk."
joint session of the Legislature.
While most praised the speech,
super collider since the presiden-
tial campaign last fall, when he
Bush's support for the super
some lawmakers complained that
cöllider was one of the few sub-
endorsed the huge scientific pro-
Bush ignored proposed defense
stantive issues in the 18-minute
cuts that could cost the Dallas-
ject that eventually could pro-
duce thousands of jobs in the
speech laced with nostalgia and
Fort Worth area up to 3,000 jobs
references to the state's econom-
Dallas area.
and billions of dollars in federal
ic rebound.
funds and had failed to recognize
While the Republican presi-
dent's budget proposal included
"There is no place on earth
lingering economic and social
like Texas," Bush said, noting
start-up funds for the super colli-
problems.
the state's pink granite Capitol
stands one foot taller than the
Staff writers Robert V. Camuto and Ben-
Please see BUSH, A-12
nett Roth contributed to this report.
national Capitol.
H
Thursday, April 27, 1989
The Ballas Morning Nelus
15 A
BUSH VISITS TEXAS
Bush says he thinks Texas economy is on rebound
medical research; and Austin is in
ogy."
wake of the Alaska oil spill.
Continued from Page 1A.
payments, and thousands
the forefront of microelectronics.
"True, some problems of the recent past linger.
"True, some problems of the re-
He also called for more
of laid-off workers."
He praised Texas' leadership for
Some areas of the state are recovering more slowly
cent past linger," he said. "Some
search into how to recover secon
But he said: "Strong men and
beginning this turnaround, sin-
areas of the state are recovering
ary and tertiary oil. And notir
women are challenged by adversity.
gling out Mr. Clements and Republi-
than others. But the way is clear to a future as
more slowly than others. But the
Texas' supply of natural gas,
I
believe Texans have proven that."
can Sen. Phil Gramm and Demo-
bright and promising as the blue Texas sky - a
way is clear to a future as bright
again called for Congress to full
Throughout his speech, Mr.
cratic Sen. Lloyd Bentsen.
and promising as the blue Texas sky
decontrol that fuel
And he pledged strong backing
new reliance on a diversified economy and the
- a new reliance on a diversified
Bush was careful to mingle the
"Texas is starting to feel like i
good with the bad. He expressed
for the federal government's Super-
economy and the technologies of
conducting Super Collider, which is
technologies of the next century."
old self again," Mr. Bush conclude
confidence that despite some "dark
the next century."
"There is again a feeling amor
clouds" on the economic horizon,
scheduled pto be built in Ellis
- President Bush
Mr. Bush added, "No matter
Texans that anything is possible
Texas is on the rebound.
County, south of Dallas.
how diversified and high-tech
Who knows? The Astros might eve
as "There may be a few more
"The SSC is a key to understand-
While the president acknowl-
sued, tried and, if guilty, put into
Texas becomes, a strong domestic
win in the National League and th
bumps and bruises ahead," Mr.
ing nature and to developing the
edged that many Texans are con-
prison."
energy industry is important to the
Texas Rangers, under enlightene
Bush said. "But make no mistake,
technologies and industries of the
cerned about "the continuing cri-
In forecasting the state's re-
future of this state and all of Amer-
new leadership, might win in th
Texas is back - back in the saddle,
21st century," said Mr. Bush.
sis" in the savings and loan indus-
bound, Mr. Bush cited the lowest
ica."
American League."
strong in every way."
"Let me assure you, I will back
try, he also noted that the Senate
Texas unemployment rate in four
He noted that the Dallas-Fort
the construction of the SSC because
has passed his S&L bailout package.
years as a sign that the economy is
He reiterated his commitment
The-president's son, Dallas bus
Worth metropolitan area is a leader
it is good for the entire United
And he reiterated his;promise that
becoming more diversified. And he
to preserving the domestic energy
nessman George W. Bush, is a ne
in defense and aviation technology;
States of America," he said, trigger-
"those who willfully abuse the trust
further boasted that Texas is be-
"industry despite some questions
owner of the Texas Rangers bas
Houston is a center of space and bio-
ing applause.
of small savers can expect to be pur-
coming "a world center of technol-
*about future oil production in the
ball team.
Photo Copy Preservation
CB CB GH MS
Issue 89:4
1.7
989
FISCAL
Bob Bullock, Texas Comptroller of Public A
Economy
ter
Index
Industr
S
Many Texas busi
High-tech superstars
During 1983-88, five high-tech industries created a total
of 38,500 new jobs. As a group, they added positions
at an 8 percent annual rate.
SUPERSTAR
Wages, new jobs in thousands
Miscellaneous
$21.0
plastics mfg.
7.2
Health spending
could boost Texas'
Aircraft
$33.1
share of federal
14.5
grants
Electronic
$28.8
Legislative proposals
parts mfg.
by the Comptroller's
5.2
$39.3
Office would allow the
state to capture more
A is an area of
Texas industry
Missiles &
federal aid money for
the superstar state's economy (group that
space mfg.
5.5
medical services for
$40.0
Texas' poorest citizens
Computer
by raising the state's
of similar
cigarette tax. Page 7.
added at 1983 and with of
programming
6.1
between annual average job more. growth
4 percent or
Annual wages per employee
Texas at a glance
(based on 1st quarter 1988)
Financial Tables
Job increase from 1983-88
Pages 9-11.
SOURCES: Texas Employment Commission and Bob Bullock, Comptroller of Public Accounts.
he fastest-
A close look at the
much of the state's
T
growing
highest-growth indus-
economy was rocked by
Texas in-
tries can test some
the changing fortunes
dustries
commonly-held notions
of oil and real estate.
are help-
about the trends that
But 28 other industries
ing to create and define
are shaping the new
enjoyed an explosion of
Passengers taking off
the state's emerging,
Texas: Will the future
in record numbers
job growth-accounting
The number of passen-
post-bust economy-an
economy be dominated
for four out of every five
gers flying through
economy shifting from
by high-tech, high pay-
Texas jobs created be-
Texas airports has
over-reliance on energy
ing professions, or by
tween 1983 and 1988.
soared in recent years.
to a healthy diversity of
low-wage service jobs?
During this time,
Page 12.
manufacturing, services
During the boom-and-
these 28 "superstar" in-
and trade.
bust cycle of the 1980s,
See page 2
Industry superstars
dustries each created
more than 5,000 new
Superstar industries job growth
jobs and added employ-
Of the 28 superstars, psychiatric hospitals added jobs
ment substantially
fastest during 1983-88.
faster than the overall
Growth in the
state rate.¹ In all, the
Annual average
superstar industries
Rank Industry
percent growth
superstar
created 347,500 of the
1 Psychiatric hospitals
39.7
net total 428,000 new
2 Health & allied services
17.3
industries is
jobs added in Texas in
3 Temporary help services
15.1
producing
the 1983-88 period.
4 Employment agencies
13.6
(While Texas lost
5 Computer programming services
13.0
207,000 jobs during the
6 Miscellaneous business services
12.5
lasting
1986-87 recession, all of
7 Airlines
10.7
changes in
these jobs have been re-
8 Mortgage companies
10.1
gained and total em-
9 Missile & spacecraft manufacturing
10.1
the Texas
10 Domestic services
9.9
ployment is now higher
11 Legal services
9.5
than ever before.)
economy.
12 State savings & loan associations
9.3
"The superstar indus-
13 Management, consulting & public relations
8.6
tries prove something
14 Security brokers & dealers
8.6
I've said before-the
15 Electronic parts manufacturing
7.8
Texas economy has fi-
16 Aircraft manufacturing
7.7
nally developed a re-
17 Child day care services
6.8
silience and strength
18 Family clothing stores
6.4
that will enable it to
19 Real estate agents & managers
6.3
20 Miscellaneous plastics manufacturing
5.8
prosper in spite of
21 Equipment rental & leasing
5.6
short-term reversals,"
22 Physicians' offices
5.1
said Comptroller Bob
23 Real estate operators
4.8
Bullock.
24 Cleaning & janitorial services
4.8
THE
The industry super-
25 Accounting & auditing services
4.6
of
COMPTROLLER
stars make up a diverse
26 Insurance agents & brokers
4.3
OFFICE
group that includes
27 Detective & protective services
4.2
spacecraft manufactur-
28 Restaurants & bars
4.0
ers and day-care work-
28 superstars average-6.7
ers, as well as stock
Total Texas average-1.4
FISCALNOTES
brokers, clothing retail-
ers and physicians. Not
SOURCES: Texas Employment Commission
a single one of the su-
and Bob Bullock, Comptroller of Public Accounts.
perstars is involved in
Growth in the boom-
tech manufacturing in-
oil and gas.
related companies has
dustries and another
Articles and analysis ap-
These 28 industries
cooled off since the re-
benefits from advanced
pearing in Fiscal Notes
fall into four basic cate-
do not necessarily repre-
cession. But the other
technological processes.
sent the policy or en-
gories: high-technology
categories continue to
During 1983-88, the
dorsement of the Comp-
companies, high-paying
expand. Their growth is
five high-tech super-
troller of Public Accounts.
service industries, other
producing lasting struc-
stars created 38,500
Space is devoted to a
services, and industries
tural changes in the
new jobs, producing
wide variety of topics of
related to the real estate
Texas interest and general
Texas economy.
new employment at a
boom of the mid-1980s.
government concern.
rate of 8 percent a year.
Contributors to this issue
Hightechtakesoff: High-
In 1988, average wages
include: Phyllis Coombes,
1 Based on Texas Employment
technology industries
per employee for the
Linda Gibson, Don Kiser,
Commission nonfarm wage and
are often touted as a vi-
high-tech superstars
Kate McKenna, Roy
salary employment, first quarter
tal part of Texas' eco-
were $31,100, substan-
Morey, Dwain Osborne,
1983-88; The Comptroller's Office
Audrey Pennington, Tom
defined the 28 "superstars" as in-
nomic future, and the
tially higher than the
Plaut, Dan Thompson,
dustries that gained at least 5,000
superstars survey sup-
state average of
Charles Worth Ward and
jobs and averaged at least 4.0 per-
ports this idea. Of the
$20,800.
Bruce Lanier Wright.
cent employment growth rate be-
tween 1983 and 1988, substantially
28 superstars, one pro-
Fastest-growing of the
higher than the state's 1.4 percent
vides high-technology
high-tech superstars
average annual rate for that period.
services, three are high-
was the computer pro-
2 April 1989, FISCAL NOTES
Industry superstars
gramming and software
industry uses advanced
dominated by service-
services industry. Total
technology to manufac-
related jobs, and again,
employment in the in-
ture a wide variety of
the superstars reflect
dustry rose by an aver-
specialized products
this. Aside from the five
age 13 percent annual-
such as molded auto
high-tech firms, the re-
Contrary to the
ly, from 7,300 in 1983 to
parts, packaging mate-
maining 23 superstar
more than 13,400 in
rials and various con-
industries are all ser-
stereotype,
1988.
sumer items. This in-
vice-producing. Howev-
many superstar
The Reagan-era de-
dustry's employment
er, the common idea
fense buildup produced
grew by 5.8 percent per
that a service-based
services pay
good times for manufac-
year, hiring 7,200 addi-
economy in Texas neces-
turers of guided mis-
tional workers in the
sarily means low wages
above-average
siles and space vehicles,
five-year period. This
is not supported by evi-
who increased their
job growth has occurred
dence.
wages.
Texas work force by an
at twin-plant operations
In direct contradiction
average 10.1 percent
on the Mexican border,
to the popular stereo-
between 1983 and 1988,
at large Gulf Coast
type, seven of the su-
with total industry em-
manufacturing plants
perstar service indus-
ployment rising from
and at small businesses
tries pay above-average
8,900 to 14,300.
throughout the state.
wagès. For these seven,
Electronic component
High world demand
1988 wages averaged
manufacturers, helped
makes the prospects for
$35,500, considerably
by the falling value of
continued growth seem
higher than the state
the dollar and strong
excellent.
average. In all, the
worldwide demand, in-
high-wage services su-
creased their Texas em-
Top-dollar services: An-
perstars created 81,600
ployment by an average
other popular notion
jobs between 1983 and
7.8 percent annually
holds that the future
1988, a seven percent
over 1983-88, creating
state economy will be
See page 4
5,200 new jobs. Job
gains in the Dallas-Fort
Worth Metroplex-the
Top-dollar superstars
state's high-tech cen-
ter-accounted for a
In 1988, seven service industries paid wages
large part of this
substantially better, than the $20,800 state average.
growth.
Wages, new jobs in thousands
Texas aircraft manu-
SUPERSTAR
facturing was also
Insurance agents
$25.6
boosted by higher de-
& brokers
8.2
fense spending and,
more recently, foreign
$37.4
Legal services
sales spurred by the
19.5
soft dollar. Aircraft
manufacturers increased
Physicians' offices
$39.5
their Texas employment
15.0
by 7.7 percent annually,
Management,
from 32,400 in 1983 to
consulting &
$31.0
public relations
8.8
46,900 in 1988. Indus-
try analysts expect air-
Accounting &
$24.9
craft manufacturing to
auditing services
6.8
Annual wages per employee
continue operating at
(based on 1st quarter 1988)
the current high level
Airlines
$33.8
Job increase from 1983-88
for at least two years
18.2
before the effect of de-
clining orders begins to
Security brokers,
$76.1
be felt.
dealers
5.1
S
The state's miscella-
neous plastic products
SOURCES: Texas Employment Commission and Bob Bullock, Comptroller of Public Accounts.
FISCAL NOTES, April 1989, 3
Industry superstars
year, for an 8,200-job
Boom-related superstars
gain.
Several real estate-related industries boomed in the
Physicians' offices also
mid-1980s, and have since slowed down.
qualify as high-paying
Wages, new jobs in thousands
service superstars, with
SUPERSTAR
job growth that rose by
Real estate
$17.0
5.1 percent a year, gen-
operators
12.2
erating 15,000 new jobs.
The spread of medical
Real estate
$20.3
insurance to more of the
agents & mgrs.
9.0
population, increased
medical specialization
State S&L
$23.9
and the general aging of
associations.
8.0
$28.5
the state population all
encouraged this growth.
Mortgage
companies
5.0
Other services expand:
Half of the superstar in-
Annual wages per employee
dustries paid lower av-
(based on 1st quarter 1988)
erage wages per em-
Job increase from 1983-88
ployee than the state
average in 1988. These
SOURCES: Texas Employment Commission and Bob Bullock, Comptroller of Public Accounts.
industries-all service
providers-have been
annual increase in jobs.
International Airport.
affected by the chang-
Highest paid, at an
Legal services em-
ing pattern of the
average $76,100 per
ployment rose from less
1980s' work force, as an
employee, were the se-
than 34,200 to nearly
influx of temporary and
curity brokers and deal-
53,700, a 9.5 percent
part-time workers has
ers who prospered
annual growth rate.
depressed average earn-
throughout the invest-
Much of this expansion
ings per employee.
ment boom of the
represented the hiring
The fastest-growing of
1980s, with total em-
of legal assistants and
these lower-wage indus-
ployment rising by
other support person-
tries, health and allied
5,100 jobs or 8.6 per-
nel.
services-dominated
cent annually. Nearly
Management, consult-
by home health care
In some service
half of these jobs were
ing and public relations
providers-more than
industries, an
located in the Dallas
services employment
doubled its employment
area, where brokerage
rose by 8.6 percent an-
between 1983 and 1988,
influx of
employment grew at
nually, creating 8,800
growing an average
11.7 percent annually
Texas jobs over five
17.3 percent annually
part-time and
throughout 1983-88.
years. These firms,
and creating 22,700
temporary
Airline deregulation
which offer a wide
new jobs. Another
in the 1980s increased
range of technical and
health-related industry,
workers has
hiring at Texas air car-
management expertise
psychiatric facilities,
riers, as competitive
to other businesses,
enjoyed the fastest
depressed
ticket pricing put record
have flourished in the
growth of all the super-
numbers of travelers in
wake of increasing spe-
stars, averaging 39.7
average
the air. The Texas air
cialization in the Texas
percent annual growth
earnings.
transportation industry
business community.
and adding 5,100 jobs
added 18,200 Texas jobs
Accounting, auditing
in 1983-88.
while enjoying average
and bookkeeping ser-
Some personal service
annual growth of 10.7
vices generated 6,800
industries with a heavy
percent. Nearly three-
new jobs at a 4.6 per-
reliance on part-time
quarters of these jobs
cent annual growth
and temporary workers
were created in the
rate. Employment also
also performed well.
Metroplex area, mostly
increased for insurance
Private household work-
at Dallas-Fort Worth
firms by 4.3 percent per
ers-cooks, gardeners,
4 April 1989, FISCAL NOTES
Industry superstars
maids and other domes-
tic workers-increased
Other service superstars
employment by 9.9 per-
Service industries with a heavy reliance on part-time
cent a year throughout
and temporary workers have prospered in the 1980s.
1983-88, gaining 6,500
jobs. Child day care ser-
Wages, new jobs in thousands
vices also boomed by
8,000 jobs at 6.8 per-
Detective &
$11.3
cent annual growth,
protective services
5.6
driven by ever-larger
Cleaning &
$7.3
SUPERSTAR
numbers of two-worker
janitorial services
9.5
and single-parent house-
holds.
Equipment
$17.2
Although many retail
rental & leasing
5.3
businesses bogged down
during the oil and real
$19.7
Psychiatric hospitals
estate bust, two retail
5.1
industries-clothing
stores and restaurants
Miscellaneous
$16.0
business services
and bars-produced big
15.6
employment gains, with
Child day
$7.4
many new full-time,
care services
8.0
part-time and tempo-
rary jobs.
Domestic services
$8.5
Employment at cloth-
6.5
ing stores rose by 8,700
Annual wages per employee
between 1983-88, an
Employment agencies
$15.3
(based on 1st quarter 1988)
average 6.4 percent an-
5.6
Job increase from 1983-88
nually.
And another retail
Family clothing stores
$10.9
trade superstar-restau-
8.7
rants and bars-stepped
Health & allied services
$6.7
up hiring in the 1980s.
22.7
In all, eating and drink-
ing establishments added
$11.1
Temporary help services
70,200 new jobs over
30.5
the five-year period,
climbing from 322,900
Restaurants and bars
$7.7
jobs in 1983 to 393,100
70.2
in 1988-an average 4
percent growth rate.
Much of this growth is
SOURCES: Texas Employment Commission and Bob Bullock, Comptroller of Public Accounts.
due to larger numbers
of working women and
Fastest growing of
13.6 percent average
people who live alone,
these was the tempo-
annual growth rate)
and the greater demand
rary help industry,
and miscellaneous busi-
for leisure time, which
which offers firms sig-
ness services-a broad
have boosted consumers'
nificant savings on per-
category including no-
desire for convenience.
sonnel and paperwork
taries public, business
Many of the industry
costs. Temporary ser-
records and investor in-
superstars provide busi-
vices averaged 15.1 per-
formation firms, tele-
ness services. Much of
cent annual growth in
phone answering ser-
this growth has result-
the five-year period,
vices and companies in
ed from the trend
adding 30,500 jobs.
the booming field of
among businésses to
Other successful busi-
telemarketing (15,600
contract with outside
ness services include
jobs created, with in-
firms for specialized
employment agencies
dustry employment ris-
services.
(5,600 new jobs at a
See page 6
FISCAL NOTES. April 1989 5
Industry superstars
1988, the mortgage in-
Texas employment 1983-88
dustry grew at an annu-
Texas employment hit an all-time high of 6.71 million
al rate of 10.1 percent
jobs in the last quarter of 1988.
and created 5,000 jobs.
Savings and loans also
Millions of jobs
Seasonally adjusted
registered net gains,
6.8
nonfarm employment
with 9.3 percent annual
growth and 8,000 new
jobs. But employment
6.6
in both industries has
dropped since the col-
6.4
lapse of the Texas real
estate market.
The only real estate-
6.2
related superstar that ex-
perienced steady growth
throughout the 1983-88
6.0
period was the real es-
1
234
1234
1234
1234
1234
1234
tate operator and lessor
'83
'84
'85
'86
'87
'88
industry, businesses
that manage offices,
SOURCES: Texas Employment Commission and Bob Bullock, Comptroller of Public Accounts.
apartments and other
property. Employment
ing by 12.5 percent per
of the five-year period
in this sector grew by
year).
and have since leveled
12,200 jobs in five years,
Equipment rental and
off. Several Texas in-
a 4.8 percent average
leasing services employ-
dustries related to real
annual growth rate.
ment rose by 5.6 per-
estate blossomed in the
cent annually and
mid-1980s, only to expe-
Resilient economy: While
added 5,300 jobs be-
rience falling employ-
the superstar industries
Today's industry
tween 1983 and 1988,
ment in the aftermath
prospered, much of the
as more companies dis-
of the boom years.
Texas economy stagnat-
superstars are
covered the cost advan-
Overall, real estate
ed in the 1980s, hurt by
tages of leasing.
agents, brokers and
falling oil prices and the
leading Texas
Cleaning and mainte-
managers increased
devastation of the real
to record
nance businesses, which
employment by 6.3 per-
estate market.
provide janitorial and
cent per year between
But the superstars
employment
other services, grew at
1983 and 1988, with to-
managed to thrive dur-
4.8 percent per year,
tal jobs moving from
ing the recession,
and a
netting 9,500 new jobs
25,100 to 34,100-a cu-
adding employment at a
over five years.
mulative performance
6.7 percent annual rate
revitalized
Security guard ser-
qualifying for superstar
compared to only 1.4
vices make up the
status. But employment
percent annual growth
economy.
largest portion of the
in this industry peaked
for the state economy as
detective agencies and
at nearly 38,200 in the
a whole. And today, the
protective services in-
first quarter of 1986
state's high-tech and
dustry, which has in-
and has since fallen.
service industry super-
creased employment by
Similar patterns have
stars are leading Texas
4.2 percent per year,
affected the state's sav-
to record employment
adding 5,600 new jobs
ings and loans associa-
and a revitalized econo-
over five years.
tions and mortgage
my. At the end of 1988,
bankers, which are
Texas nonfarm employ-
Boom-related superstars:
closely linked to the for-
ment hit an all-time
Most of the industry su-
tunes of Texas' real es-
high of 6.71 million, ex-
perstars gained jobs
tate and construction
ceeding the previous
steadily, but some ex-
markets.
peak of 6.68 million set
ploded in the beginning
Between 1983 and
at the end of 1985.
6 April 1989, FISCAL NOTES
Health spending
+
n-
u-
nt
)S.
so
Health spending could boost
is,
al
ew
Texas' share of federal grants
nt
as
ol-
al
ompared to
other states,
ce-
Texas gets a
Per capita expenditures
ex-
relatively
for Medicaid services
poor return
$600
th
88
on the tax dollars it
Of the 10 largest states, only
sends to Washington,
Florida spent less per
500
es-
or
and the disparity is es-
capita than Texas.
pecially dramatic in fed-
400
Federal fiscal
es
eral grants to Texas state
year 1987
es,
er
and local government.
300
nt
In 1987, Texas re-
by
ceived only $1 in grants
200
rs,
from the federal govern-
ge
ment for every $1.41
sent to Washington.
100
New York paid only 75
ile
cents to get the same
ies
federal dollar. In fact,
Texas ranked 49th
California
illiniois
he
among states in this
New North
at-
by
rate of return.
SOURCE: Texas Department of Human Services.
he
"Clearly, we're not
eal
getting our fair share of
and social programs.
gram and other state
federal aid," said Bob
programs that are eligi-
irs
Bullock, Texas Comp-
Funding lags: One ma-
ble for matching grants
troller of Public Ac-
jor reason for Texas'
of federal funds.
ir-
counts.
n,
poor showing in federal
In 1987, Texas ranked
a
Legislative proposals
grant money is the way
43rd in the nation in its
"Clearly, we're
ite
by the Comptroller's Of-
the state funds many of
per capita Medicaid ex-
.4
fice would allow the
its health and social
penditures, at $114.90
not getting
th
state to capture more
programs.
per person. Less than
our fair share
as
federal aid money for
Unlike other states,
29 percent of all Texans
he
Texas' poorest citizens.
Texas pays much of the
living in poverty are
of federal
nd
These proposals would
tab for indigent health
covered by Medicaid.
raise the state's cigar-
care through programs
Texas is 47th among
aid," said Bob
er-
tas
ette tax and direct the
funded entirely by state
states by this measure.
ent
additional revenue-
and local dollars. This
By comparison, Califor-
Bullock, Texas
no-
$166 million-to the
situation is largely due
nia covers more than 86
Comptroller
88.
state's Department of
to the patchwork man-
percent of its poor popu-
Human Services (TDHS).
ner in which these pro-
lation.
of Public
me
This additional spend-
grams evolved. Rela-
Texas' Medicaid pro-
ing by TDHS could win
tively little of Texas
gram also does not cover
Accounts.
'us
Texas $274 million more
health spending is chan-
many types of treat-
set
in federal matching
neled through the
ment commonly provid-
funds for vital health
state's Medicaid pro-
See page 8
FISCAL NOTES, April 1989, 7
Health spending
Map shows tax rate
How states' cigarette tax rates compare
Cents per package of 20
The map shows the cigarette tax rate on Feb. 1, 1989. At
30.1 to 40.0
that time 12 states had rates higher than Texas. The chart
20.1 to 30.0
shows the number of states with higher rates since 1972.
10.1 to 20.0
0.1 to 10.0
Number
of states
20
18
16
14
12
10
8
6
4
2
Number of states
0
with higher rates
'72
'75
'80
'85
'89
SOURCE: Bob Bullock, Comptroller of Public Accounts.
ed in other states. For
doctors and hospitals
per pack. Some other to-
example, Texas' Medi-
-the amounts paid to
bacco taxes also would
caid does not cover out-
health care practition-
be increased by an equiv-
patient clinic services,
ers for medical services
alent amount (about 27
but 47 other states do.
provided under Medi-
percent.)
Similarly, most states
caid-are SO low that
This increase would
provide psychiatric care
they strain the financial
give Texas the fourth-
for the elderly and for
ability of some Texas
highest cigarette tax in
children in state mental
hospitals to provide in-
the nation, about where
hospitals under Medi-
digent health care.
it stood in the 1970s.
caid, but Texas pays for
(Texas actually had
these types of care en-
The plan: Today, the
the third-highest rate
tirely with state dollars,
Texas cigarette tax is 26
throughout much of the
through the Texas De-
cents per pack. Twelve
decade, and was consis-
partment of Mental
other states have higher
tently in the top five un-
Health and Mental Re-
rates. Under the Comp-
til 1982.) This ranking
tardation.
troller's proposals, the
may be expected to fall,
And Texas' Medicaid
tax would be raised by
since at least 15 other
reimbursement rates for
seven cents, to 33 cents
See page 9
How the plan works
A 7c per pack increase in the Texas cigarette tax would yield $440 million for health and human services.
Would yield
Increase the Texas
cigarette tax from
Thus generating
Plus
$440
26c to 33c
$166 Million
$274 Million
per pack- a 7c increase
additional tax revenue
Million
in additional
(along with other
directed to state health
federal funds.
in new money
tobacco tax hikes).
and social programs.
for health and
human services.
SOURCE: Bob Bullock, Comptroller of Public Accounts.
8 April 1989, FISCAL NOTES
Texas production and consumption indicators
(Amounts in millions)
Motor fuel
Cigarette
Year and
Crude oil
Natural gas
Gallons
Cement
pkgs.
Auto sales
month
Bbls.
Value
MCF
Value
Gasoline
Diesel
Tons
taxed
net value
1987
January
62.0
$ 1,008.9
452.6
$ 634.2
650.9
110.7
0.69
147.9
$ 1,102.0
February
56.2
934.3
410.3
570.9
596.6
111.9
0.60
120.0
1,164.8
March
63.0
1,049.4
442.2
609.0
700.9
135.4
0.79
128.8
1,356.9
April
60.5
1,019.1
436.7
583.2
697.7
124.6
0.82
136.5
1,377.4
May
60.5
1,054.3
429.5
560.7
690.6
120.4
0.66
135.0
1,347.0
June
58.8
1,060.4
420.5
539.9
691.6
129.4
0.65
159.3
1,548.8
July
60.7
1,151.3
414.9
544.4
742.7
124.6
0.79
163.6
1,521.9
August
59.8
1,142.0
422.3
544.7
715.2
120.6
0.73
160.4
1,579.3
September
58.5
1,062.1
410.5
509.4
684.7
129,0
0.69
158.7
1,229.0
October
60.8
1,100.4
426.7
533.1
744.5
156.3
0.79
130.5
1,016.0
November
57.8
1,028.3
430.9
564.0
665.1
109.4
0.59
97.8
1,163.3
December
59.7
994.6
497.7
667.3
717.0
124.0
0.58
143.8
1,149.0
Total
718.3
$12,605.1
5,194.7
$6,860.9
8,297.5
1,496.3
8.38
1,682.3
$ 15,555.4
1988
January
59.8
$
950.7
456.2
$ 732.6
630.3
111.7
0.52
122.0
$ 1,150.0
February
56.2
884.6
464.9
680.8
649.6
113.8
0.57
124.2
1,364.6
March
60.2
908.3
450.5
637.2
731.2
133.3
0.69
132.1
1,448.5
April
57.8
931.4
413.4 r
555.9 Γ
699.5
114.2
0.69
125.8
1,433.7
May
58.5
961.1
422.4 r
522.0 r
722.2
115.4
0.71
139.5
1,524.0
June
57.0
896.1
408.4 r
527.1 r
723.3
133.4
0.70
141.3
1,405.4
July
57.8
828.1
422.2 r
559.2 r
718.8
117.2
0.62 r
124.7
1,512.5
August
58.4 r
829.8 r
434.5 r
606.7 r
741.9
125.9
0.67
134.9
1,217.2
September
51.8 e
702.4 e
408.6 e
596.6 e
691.2
131.7
0.59 r
141.6
1,414.1
October
47.0 e
596.0 e
421.5 e
632.3 e
693.2
123.8
0.61
132.4
1,206.2
November
52.1 e
644.5 e
423.5 e
647.9 e
698.1
123.7
0.57
129.3
1,127.9
December
53.9 e
752.4 e
720.5
133.1
0.52
140.2
1,359.1
Total
670.5 e
$ 9,885.4 e
4,726.1 e
$6,698.3 e
8,419.8
1,477.2
7.47
1,588.0
$ 16,163.2
1989
January
49.8 e
$
795.4 e
609.9
121.5
0.49
128.9
$ 1,241.5
February
103.4
Total
49.8 e
$
795.4 e
609.9
121.5
0.49
232.3
$ 1,241.5
e - estimated
r - revised
Note: Crude oil and natural gas show taxable production and net taxable value for the production month.
Totals may not add due to rounding.
SOURCE: Bob Bullock, Comptroller of Public Accounts.
states are currently con-
This increased medi-
lion a year.
raising Medicaid re-
sidering raising their
cal spending could par-
imbursements to doctors
cigarette tax rates.
tially offset the tremen-
The benefits: The $166
and hospitals, and
The proposed in-
dous medical costs of
million in state tax rev-
expanding the state's
crease would generate
smoking. In recent
enue, combined with the
Aid to Families with De-
$166 million in addi-
years, a number of
$274 million in federal
pendent Children pro-
tional tax revenue dur-
states have attempted
aid, adds up to $440
gram.
ing the 1990-91 state
to estimate these costs;
million in new money
These proposals would
budget period.
the Texas Department
for health and human
allow the state to fi-
This additional $166
of Health (TDH) has es-
services. This money
nance significant im-
million would be direct-
timated that expendi-
could be put to work in
provements in state
ed to TDHS, for use in
tures for the prevention,
several different ways,
health care at a rela-
state programs that are
diagnosis and treatment
including:
tively low price. In ef-
eligible for more federal
of smoking-related dis-
changing Medicaid
fect, Texas can earn
aid. This would bring
eases and medical con-
eligibility to give more
nearly two extra dollars
another $274 million in
ditions exceed $1.6 bil-
low-income, pregnant
in federal aid for each
federal funds to Texas
lion annually in Texas.
women, children and
dollar of additional cig-
during 1990-91. Essen-
TDH also estimates
nursing home residents
arette tax revenue, and
tially, Texas could more
that lost income and
access to health ser-
use them to benefit
than double its money
productivity for individ-
vices;
the state's neediest citi-
from the rate increase
uals who are disabled by
expanding Medicaid
zens.
by taking better advan-
or die prematurely from
coverage to more types
its.
tage of federal aid.
smoking totals $1.7 bil-
of treatment;
FISCAL NOTES, April 1989, 9
State of Texas
1
February statement of cash condition
(Amounts in millions)
General revenue
Special funds
Total cash
Beginning cash balance February 1, 1989
$ 730.4
$1,527.3
$2,257.7
Revenue/expenditures
Revenue
947.7
922.2
1,869.9
Expenditures
-486.8
-945.6
-1,432.5
Net income (outgo)
460.8
-23.4
437.4
Net interfund transfers and
investment transactions
-458.1
196.6
-261.5
Total transactions
2.7
173.2
175.9
2
Ending cash balance February 28, 1989
$ 733.1
$1,700.5
$2,433.7
Cash stated is Comptroller's Office Book Cash and may vary from cash deposited with the Treasury. Net amounts shown (less refunds)
exclude some transactions not cleared through the Comptroller's Office. Suspense and Trust Funds are included as are unemployment
compensation trust funds collected by the state but held in the Federal Treasury. Totals may not add due to rounding.
2The ending General Revenue Fund balance includes $947.6 million borrowed from other state funds for cash flow management.
SOURCE: Bob Bullock, Comptroller of Public Accounts.
State revenue 1
Monthly
Year-to-date
All funds
revenue
September 1988 - February 1989
(Amounts in millions)
February
Percent change
1989
Revenue
from last FY4
Tax collections by major tax
Sales tax
$ 619.1
$ 3,465.7
15.8%
Oil production tax
10.4
190.5
-31.7
Natural gas production tax
61.1
308.8
25.6
Motor fuels taxes (gasoline, diesel, LPG)
38.5
672.9
-6.5
Motor vehicle sales tax
72.8
459.5
7.4
Franchise tax
8.0
-74.9
-533.9
Cigarette and tobacco taxes
28.4
210.4
4.6
Alcoholic beverages taxes
23.2
159.3
1.3
Insurance companies 2 tax
1.4
122.9
55.6
Utility taxes
36.3
83.8
0.9
Inheritance tax
3.1
56.8
9.2
Telephone tax
0.0
7.6
-33,5
Hotel and motel tax
12.4
51.1
30.8
Other taxes
3
1.1
14.4
22.8
Total tax collections
$ 915.8
$ 5,728.7
7.8%
Revenue by receipt type
Tax collections (detail above)
$ 915.8
$ 5,728.7
7.8%
Business/professional fees
13.1
92.6
-3.4
Noncommercial permits and licenses
62.3
497.1
5.7
Violations, fines and penalties
8.6
46.6
9.4
State service fees
23.9
143.5
10.2
Sales, rental and repayments
of goods and services
14.3
76.7
3.4
Federal receipts
393.6
2,388.1
7.4
Interest/dividends
314.9
1,582.7
9.3
Land income
23.2
133.2
-11.6
Other receipts
100.0
501.3
39.5
Total revenue
$1,869.9
$11,190.6
8.5%
Excludes some revenue not cleared through the Comptroller's Office. Totals may not add due to rounding.
²Includes the Utility, Gas Utility Administration and the Public Utilities Gross Receipts taxes.
³Includes the Ad Valorem, Cement and Sulphur taxes and other occupation and gross receipts taxes not separately identified.
4Due to accounting changes, some percentages are based on different data than reported in the last fiscal year.
SOURCE: Bob Bullock, Comptroller of Public Accounts.
10 April 1989, FISCAL NOTES
State expenditures by object 1
All funds
Monthly
Year-to-date
expenditures
September 1988 - February 1989
(Amounts in millions)
February
Percent change
Objects
1989
Expenditures
from last FY
Salaries and wages
$ 360.1
$ 2,083.0
8.2%
Other personal services
207.2
1,085.7
10.6
Consumable supplies and materials
25.2
146.6
-8.5
Current and recurring operating expenses
56.8
362.8
5.7
Assistance and medical care for the needy
252.3
1,363.4
5.7
Foundation school program grants
213.0
2,363.4
1.3
Other public education grants
62.2
470.6
23.4
Grants to higher education
5.3
236.2
1.3
Other grants
71.8
431.2
15.6
Payment of principal on indebtedness
0.1
83.9
-56.5
Payment of interest and other claims
4.2
164.5
-3.3
Capital outlay for highways
113.2
848.9
1.7
Capital outlay for land and buildings
32.4
154.9
28.1
Other capital outlay
28.6
250.7
-5.0
Total expenditures
$1,432.5
$10,045.7
4.6%
1Excludes some expenditures not cleared through the Comptroller's Office. Totals may not add due to rounding.
SOURCE: Bob Bullock, Comptroller of Public Accounts.
State expenditures by function 1
Monthly
Year-to-date
All funds
expenditures
September 1988 - February 1989
February
Percent change
(Amounts in millions)
1989
Expenditures
from last FY2
Category
Administrative
Executive departments
$
45.0
$ 266.1
0.8%
Business regulatory commissions
17.2
95.1
28.3
Legislative
5.3
27.7
9.7
Judicial
4.3
25.7
2.6
Total
$
71.7
$ 414.7
7.2%
Services
Welfare
$ 297.6
$ 1,635.4
6.5%
Mental health, state homes
and corrections
123.4
679.0
21.0
Health and sanitation
28.0
166.8
10.0
Law enforcement
14.7
89.0
4.2
Total
$ 463.7
$ 2,570.2
10.1%
Improvements
Highway maintenance and construction
$ 180.6
$ 1,272.0
0.1%
Natural resources
13.9
84.6
6.3
Parks and monuments
8.9
63.0
7.4
Total
$ 203.4
$ 1,419.6
0.8%
Education
Support to state and local education
$ 469.9
$ 4,199.0
3.9%
State contribution to teacher retirement
65.9
411.4
3.0
Total
$ 535.8
$ 4,610.4
3.8%
Other Expenditures
Grants to political subdivisions and others.
$
71.8
$
431.2
15.6%
Payment of public debt
4.2
248.2
-31.5
Social security contribution
47.4
231.8
7.8
State contribution to employee retirement
32.3
103.2
58.2
Miscellaneous
2.0
16.5
-6.3
Total
$ 157.8
$ 1,030.9
-0.2%
Total expenditures
$1,432.5
$10,045.7
4.6%
1 Excludes some expenditures not cleared through the Comptroller's Office. Totals may not add due to rounding.
2Due to accounting changes, some percentages are based on different data than reported in the last fiscal year.
SOURCE: Bob Bullock. Comptroller of Public Accounts.
FISCAL NOTES, April 1989 11
Passengers taking off in record numbers
The number of passengers flying through Texas airports has soared in
recent years and 1988 was no exception as 44.5 million passengers flew
out of the state's 13 largest airports.
Glance
Dallas-Fort Worth International Airport continues to be one of the
world's busiest airports. More than 22.1 million passengers boarded
planes at D/FW in 1988.
Total passenger traffic at Texas' 36 largest airports rose from
nearly 27.5 million in 1979 to 43.7 million in 1987-a 37.1
percent increase.
Number of passengers
catching planes in Texas
Millions of passengers
79 '80 '81 '82 '83 '84 '85 '86 87
Texas' busiest airports
22.1
43.7
Millions of passengers
41.9
boarding planes in 1988
41.0
7.5
37.4
32.8
31.3
3.8
29.2
27.5
26.8
2.5
2.5
1.9
1.4
0.5
0.6
0.6
0.2
0.4
0.4
McAllen Corpus Christi
Midland Paso
Austin Dallas Loventonio Sanouston Hobby Houston Int'l
D/FW
SOURCES: Bob Bullock, Comptroller of Public Accounts
and U.S. Department of Transportation.
FISCALNOTES
BULK RATE
U.S. POSTAGE PAID
TEXAS COMPTROLLIST
AUSTIN, TX
Economic Analysis Center
PERMIT NO. 1411
OF PUBLICE
OF
For additional copies write:
ACCOUNT
Bob Bullock, State Comptroller
Economic Analysis Center
P.O. Box 13528, Capitol Station
5063758 FIS
Austin, TX 78711
MR. RANDALL H. ERBEN
DEPUTY DIRECTOR E GENERAL COUNSEL
Material in Fiscal Notes is not
OFFICE OF STATE-FEDERAL RELATIONS
copyrighted and may be repro-
INTERASENCY
duced. The Comptroller of Pub-
lic Accounts would appreciate
credit for the material used and a
copy of the reprint.
12 April 1989, FISCAL NOTES
Brent Petersen
I believe America can meet any challenge to remain
leader. But we must speed up our pace from slow m
time. The schools must improve education; the wo
improve productivity; the plants must improve their
We owe it to our children to pass on to them, intact,
precious inheritance-the American heritage.
Jack Anderson: We must act now
Who Owns Los Angeles?
About 64 percent of the real estate in downtown Los Angeles is owned by foreigners,
much of it by people in Tokyo, London, Bonn and Toronto. So is 39 percent of
ers,
ic cli
as well as a third of the office space in Minneapolis, increasingly, the towering buildings that form the familiar
our cities are being purchased by foreign investors who have benefited from the slumping U.S. dollar.
vigil
able
Fo
U.S.
sume
of Of
biles
It
or C
who
mag
men
ager
men
mat
over
lion
. H
owr
at l
plar
Japa
The
of d
A f.
strc
maj
clos
chas
ices
to C
thei:
T
eig
States actually bid against one another-offering incentives and subsidies-to attract foreign investors. Below is a breakdown, in
cou
mons of dollars, of foreign-owned plants, property and equipment in all 50 states and the District of Columbia, as of 1986.
An
ves
$40,324,000,000
Oklahoma
5,172,000,000
Kansas
2,158,000,000
S
37,017,000,000
Colorado.
4,881,000,000
New Mexico
2,132,000,000
off
18,016,000,000
4,442,000,000
Hawaii.
2,013,000,000
tra
15,134,000,000
Massachusetts
4,038,000,000
Oregon
1,671,000,000
sta
13,562,000,000
Artzona
4,006,000,000
Montana
1,597,000,000
lici
11,057,000,000
Kentucky
3,959,000,000
lowe
1,555,000,000
(
10,608,000,000
3,586,000,000
Maine
1,373,000,000
COI
9,530,000,000
Issort
3,487,000,000
District of Cokumbia
L,362,000,000
Th
9,487,000,000
3,398,000,000
North Dakota
1,362,000,000
for
9,293,000,000
3,187,000,000
Nevada
.000
tor
8,611,000,000
3,153,000,000
Arkansas
1.148.058.000
ert
8,270,000,000
2,931,000,000
New Hampshire
764,000,000
ex
7,272,000,000
Delaware
,000,000
Rhede Island
474,006,000
bu
5,744,000,000
9,000,000
Vermont
154,000,000
pe:
5,529,000,000
20,000,000
Nebraska
0,000,000
am
Virginia
5,261,000,000
16,000,000
South Dakota
393,000,000
rea
5.192.000,000
81,000,000
Maho
382,000,000
all
PARADE MAGAZINE APRIL 16, 1989 . PAGE 5
04-07-89
TEXAS AND U.S. LABOR FORCE ESTIMATES
STATE OF TEXAS ACTUAL
CIVILIAN
LABOR FORCE
EMPLOYMENT
UNEMPLOYMENT
RATE
MAR 1989
8,159,500
7,641,600
517,900
6.3
FEB 1989
8,150,500
7,556,500
594,000
7.3
MAR 1988
8,138,700
7,466,900
671,800
8.3
STATE OF TEXAS SEASONALLY ADJUSTED
CIVILIAN
LABOR FORCE
EMPLOYMENT
UNEMPLOYMENT
RATE
MAR 1989
8,283,000
7,788,000
495,000
6.0
FEB 1989
8,254,000
7,703,000
551,000
6.7
MAR 1988
8,254,000
7,605,000
649,000
7.9
UNITED STATES ACTUAL
CIVILIAN
LABOR FORCE
EMPLOYMENT
UNEMPLOYMENT
RATE
MAR 1989
122,222,000
115,844,000
6,378,000
5.2
FEB 1989
121,906,000
115,023,000
6,883,000
5.6
MAR 1988
119,957,000
112,867,000
7,090,000
5.9
UNITED STATES SEASONALLY ADJUSTED
CIVILIAN
LABOR FORCE
EMPLOYMENT
UNEMPLOYMENT
RATE
MAR 1989
123,264,000
117,136,000
6,128,000
5.0
FEB 1989
123,181,000
116,853,000
6,328,000
5.1
MAR 1988
120,936,000
114,129,000
6,807,000
5.6
MAR 1989 U.S. EMPLOYMENT RATE INCLUDING MILITARY -- 5.1% (ACTUAL),
4.9% (SEASONALLY ADJUSTED). RESIDENT ARMED FORCES, U.S. -- 1,684,000.
THE STATEWIDE ACTUAL UNEMPLOYMENT RATE DROPPED A FULL PERCENTAGE POINT
BETWEEN FEBRUARY AND MARCH. THE MARCH RATE WAS 6.3 PERCENT, DOWN FROM
7.3 PERCENT IN FEBRUARY AND TWO PERCENTAGE POINTS BELOW THE 8.3 PERCENT
RECORDED IN MARCH 1988. IN MID-MARCH 1989, THERE WERE AN ESTIMATED
518,000 JOBLESS TEXANS, WHILE TOTAL EMPLOYMENT INCREASED TO 7,642,000.
TOTAL EMPLOYMENT WAS UP OVER 175,000 FROM THE YEAR-AGO LEVEL. THESE
FIGURES REFLECT CONTINUED IMPROVEMENT IN THE TEXAS ECONOMY. WHILE TWO
CONSECUTIVE MONTHS OF DECLINING UNEMPLOYMENT ARE ENCOURAGING, IT IS
STILL TOO EARLY TO KNOW IF THIS REPRESENTS A REAL UPTURN IN THE
STATE'S ECONOMY.
THE SEASONALLY ADJUSTED TEXAS RATE ALSO DECLINED, DROPPING FROM 6.7
PERCENT IN FEBRUARY TO 6.0 PERCENT IN MARCH. THE CURRENT RATE IN THIS
SERIES WAS ALSO CLOSE TO TWO PERCENTAGE POINTS BELOW THE YEAR-AGO RATE
OF 7.9 PERCENT. THE U. S. ACTUAL UNEMPLOYMENT RATE ALSO DECLINED OVER
THE MONTH, FROM 5.6 PERCENT IN FEBRUARY TO 5.2 PERCENT IN MARCH. THE
SEASONALLY ADJUSTED U. S. RATE SLID DOWNWARD FROM 5.1 PERCENT TO 5.0
PERCENT THE LOWEST IT HAS BEEN SINCE DECEMBER 1973.
WILLIAM P. CLEMENTS JR.
Remarks
Sematech news conference
January 6, 1988
Austin
Sematech has found a home. And it's a homerun for Texas.
This project is great news for Texas. It's a tremendous boost for the
Texas economy and has state, national and international implications.
Texans throughout our state should be proud of the many people who
helped make this happen.
The Texas business community, the University of Texas System, the Texas
Department of Commerce, the city of Austin and its chamber of commerce, and
the Texas congressional delegation worked with my office in total cooperation
and teamwork to bring Sematech to our state.
Our team's unfaltering efforts, sheer determination and just plain ol'
hard work rightfully convinced Sematech directors that Texas is the place to
be -- and Texas welcomes you, Sematech, with open arms.
More than anything, the decision by Sematech symbolizes the great
opportunity and the long-term growth potential of the Texas economy. It
illustrates what I have been saying for more than a year: The Texas economy
is on the move, diversifying and strengthening.
We in state government are diligently working to convince new businesses
and industries to locate in Texas. Our goal is clear: We want to help
create new jobs for our citizens and a prosperous future for our children.
Sematech is one more step -- a great step -- on our path toward that
end.
Sematech brings jobs, investment and a cutting-edge technology to Texas.
Sematech will bolster the entire state's status in the field of high
technology research and strengthen our manufacturing base.
It will make Central Texas a world-class research region. It will give
us a leading edge as we compete for future high tech projects and businesses,
as we press for a greater share of federal grants and research dollars. And,
as a result, our state's attraction to university researchers will be
enhanced.
( MORE )
Before I end, I want to once again commend the unified effort that made
our proposal the cream of the crop in the national competition.
This is a prime example of what leadership and bipartisan cooperation can
accomplish when we put our minds to it.
I also want to thank Sematech for their confidence in our state.
We are confident that you will succeed and are proud that you have selected
Texas to be your home. We in Texas know you made the right choice.
This is a great way to start the new year.
SEMATECH
INNOVATION FOR AMERICA'S FUTURE
FOR RELEASE: Immediate
CONTACTS:
Jeanne Locke
For Sematech
(408) 973-9973
Reggie Bashur
Texas Governor's Office
(512) 463-1826
SEMATECH SELECTS AUSTIN, TEXAS
AUSTIN, TX., January 6, 1988 Sematech - - the industry
consortium aimed at ensuring manufacturing excellence and
leadership for the U.S. semiconductor industry -- announced
today that it has selected Austin, Tx., as the location in which
it will conduct its advanced research efforts.
Sematech also announced that the other 11 finalists
(Arizona, California, Colorado, Florida, Massachusetts,
Missouri, New Mexico, New York, North Carolina, Oregon and
Wisconsin) will be awarded $50,000 planning grants to submit
project proposals for university "centers of excellence."
Several will be chosen as "centers of excellence" for
specific research disciplines. Other projects could also be
identified at the university level later this year.
During the extensive site search, Sematech officials were
continually impressed with the expertise shown in the fine
university systems throughout the nation.
"These grants are one way to take advantage of that exper-
tise and channel it SO that it is useful to the industry," said
2900 Gordon Ave., Suite 201, Santa Clara, CA 95051 Telephone 408-749-7710, FAX 408-773-1767
Charles E. Sporck, Sematech board chairman and president and CEO
of National Semiconductor Corp.
Sematech also expects to have research and development
involvement with several National Laboratories in support of
Sematech's long-range goals.
Texas Governor Bill Clements welcomed Sematech to the
state, saying, "Sematech is great news for Texas. It represents
a project that has state, national and international
implications and will be a tremendous boost for the Texas
economy. The Texas business community, the University of Texas
System, the Texas Department of Commerce, the city of Austin,
and the Texas congressional delegation worked with me in total
cooperation and teamwork to bring Sematech to Texas. We are
confident you will succeed and are proud that you have selected
our state to be your home. This is a great way to start the new
year. II
Mr. Sporck, in accepting the offer from the state, said,
"We are extremely pleased with this offering and want to thank
everyone involved in developing and presenting it. We look
forward to joining you as neighbors.
"I also want to thank the hundreds of people who worked on
proposals from many other states. We sincerely appreciate the
invitations they offered. The bonus we found in the university
system throughout the country greatly multiplies the Sematech
effort here in Texas. "
Key considerations in Sematech's decision to select the
Austin site were the presence of an existing facility, extensive
state and local government support as well as a strong financial
incentive package. This combined with an impressive planned
relationship with the University of Texas provided Texas with a
comprehensive and well-balanced proposal.
Sematech expects to begin occupying this facility in the
first quarter of 1988, and to be processing semiconductor wafers
before the end of the year.
The Sematech site selection committee -- composed of
members of Sematech's board of directors -- was chaired by
Sanford L. Kane, IBM general technology division vice president,
industry operations. The committee solicited proposals from the
governors of all 50 states. It studied the proposals and made
its recommendations to the board of directors.
The board voted unanimously to accept the Texas offer.
-- 30--
OFFICE OF THE COVERNOR
FOR IMMEDIATE RELEASE
CONTACT: REGGIE BASHUR
APRIL 7, 1989
ROSSANNA SALAZAR
(512) 463-1826
TEXAS UNEMPLOYMENT LOWEST IN FOUR YEARS
Governor Bill Clements today said reports that the state's unemployment
rate dropped to its lowest level in more than four years is "great news for
the people of Texas."
The governor's remarks came in response to reports from the Texas
Employment Commission, which today said that the statewide jobless rate,
seasonally adjusted, fell in March to 6.0 percent -- the lowest its been
since November 1984. Last month's unemployment rate is also 1.9 percentage
points below the March 1988 posting of 7.9 percent.
The number of employed Texans in March grew to 7.788 million, second
only to June 1988, which set a record with 7.853 million Texans employed.
"The hard work of the people of Texas is paying big dividends: jobs,
jobs, jobs," Clements said. "Texas is on the move. Texas is back.
"Texas has shaken off the recession and is re-emerging as an economic
force to be reckoned with."
-- 30 --
OFFICE OF THE COVERNOR
THURSDAY, DECEMBER 22, 1988
CONTACT: REOGIE BASHUR
ROSSANNA SALAZAR
(512) 463-1826
REMARKS OF COVERNOR BILL CLEMENTS
ANNOUNCING FRUIT OF THE LOOM'S EXPANSION TO TEXAS
AUSTIN
With me today is Bill Farley, chairman of Farley Industries and Fruit of
the Loom Incorporated. We are also delighted to have with us Bill Card, the
Mayor of Harlingen. Last week, Mayor Card and I met with John Holland,
President and Chief Executive Officer of Fruit of the Loom, to convince the
company to join the growing number of businesses that are rediscovering our
many strengths in Texas.
I'm delighted to say that after considering a number of other sites
across the nation, the world's largest producer of knit apparel has indeed
decided to build a 38 million dollar textile mill in Harlingen.
This plant will bring 1,700 new jobs to Texas within five years and a
total of 3,200 within a decade.
But the good news doesn't end there.
Fruit of the Loom's decision to expand to Texas represents our first
success in a new and bold initiative to bring food and fiber processing to
Texas.
Just two weeks ago, I called for Texas to underscore its standing as a
leader in agribusiness by bringing more agricultural processing to our state.
There's no reason why our raw goods should be exported to some other state
for production, just as there's no reason why Texas can't create new jobs by
processing more of our own and more of the nation's commodities. That's
MORE
exactly the point made by my Task Force on Agricultural Development when it
issued its report earlier this month.
Well, Fruit of the Loom is going to help us keep our goods in Texas and
foster new jobs for Texans.
For instance, the company will take this 300-dollar bale of Texas
cotton, process it, and turn it into apparel valued at more than 3,000
dollars -- apparel that you see here on this product board.
That's increasing the value of this one bale of cotton by more than
10-fold -- and it's an expansion that ripples throughout the Texas economy.
Clearly, a significant opportunity exists to broaden our economy through
this sector. Today, agribusiness accounts for less than 10 percent of the
"total value added" to our Texas economy through processing and
manufacturing. That's half of the national average of 20 percent. By
reaching that average, Texas can create more than 250,000 new jobs for Texans
and bolster our annual gross state product by 24 billion dollars.
Increasing our share of the nation's agricultural processing, creating
jobs in Texas -- this is my highest objective for Texas agriculture and for
our state's economic development. Afterall, we're America's number one
producer of such easily processed goods as cotton, mohair and wool. And we
rank in the top five in the production of many fruits and vegetables --
pecans, rice, onions and sweet potatoes, to name a few.
So why should we ship Texas' raw goods outside the state for processing
and manufacturing when we can keep our commodities here in Texas and produce
more jobs for our people?
Texas' raw materials used by Texas' workers to create Texas' products to
foster Texas' economic vitality and Texas jobs -- that's what this is all
about. It makes absolute economic sense to do just that. And now, just two
MORE
weeks after I kicked off this initiative with my Task Force, Fruit of the
Loom is our first homerun.
In addition to the 3,200 direct jobs, the company's investment will
trigger 4,200 indirect jobs; increase personal income by more than 122
million dollars a year; and expand the annual gross state product in Texas
by nearly 447 million dollars.
As part of its annual production, the plant will take cotton valued at
13 million dollars and make 58 million pieces of apparel worth 120 million
dollars.
Clearly, Fruit of the Loom recognizes our many strengths in Texas. Of
course, our greatest assets include our proximity to Mexico and the potential
of our maquiladora program. I'm happy to say that Fruit of the Loom hopes to
open a twin plant in Mexico within the next few years -- a move made all the
more feasible by their new location in Texas.
Mr. Farley, I know that our partnership will be a strong and successful
one. And I couldn't be more pleased to count such a dynamic company as part
of our growing Texas family. Fruit of the Loom is indeed a great American
success story. In the past three years alone, the company's annual sales
have skyrocketed by almost 100 percent to 1 billion dollars.
END
FACT SHEET
FRUIT OF THE LOOM, INC.
Integrated Textile Mill in Harlingen, Texas
0
Fruit of the Loom, Inc., the world's largest producer of knit
apparel, will build the largest integrated textile and apparel
manufacturing plant in Texas at Harlingen.
-
employ 1,700 Texans within five years, expanding to a total of
3,200 employees within ten years;
- total investment in plant and equipment is $38 million.
o
The new Fruit of the Loom plant will process 48,000 bales of cotton
valued at $13.2 million annually into 58 million pieces of knit
apparel valued at $120 million.
o
This investment will have a major impact on the entire Texas econo-
my, creating an additional 4,200 indirect jobs, $122 million annual
increase in personal income, and a $446.9 million increase in the
State Gross Product. (Source: Texas Department of Commerce).
0
The 350,000 square foot plant, located on a 92-acre site, will
generate in excess of $20 million annual payroll.
0
Fruit of the Loom officials indicate that construction of the
facility could begin in early summer of 1989, and will begin full
operation within one year.
o
Fruit of the Loom officials have expressed interest in future
expansion of the Harlingen facility to include operations of a
maquiladora plant in Mexico.
0
The Fruit of the Loom product lines by percent of sales: 48% men's
and boys' underwear, 39.2% activewear (knit tops and fleecewear),
5.7% women's and girls' underwear and 7.1% family socks.
0
Fruit of the Loom, Inc. currently has twenty-nine manufacturing and
distribution facilities located in the United States, Canada and
Europe employing over 23,000 people. Employment has grown over 40%
in the last thirteen years.
o
The brand names used for marketing the knit apparel products include
Fruit of the Loom, BVD, Screen Stars, Christian Dior Hosiery, Camp
Hosiery and several other licensed characters utilized in children's
underwear.
0
Bill Farley is Chairman of Farley Industries, Inc., the parent
company of Fruit of the Loom, Inc., and Jack Albertine is Vice
Chairman of Farley Industries. John Holland is Chief Executive
Officer of Fruit of the Loom, and Joe Medalie is Vice Chairman.
OFFICE OF THE COVERNOR
DECEMBER 8, 1988
CONTACT: REGGIE BASHUR
ROSSANNA SALAZAR
(512) 463-1826
STATEMENT OF COMERNOR BILL CLEMENTS
ANNOUNCING THE TEXAS EXPANSION OF RUJITSU AMERICA INC.
RICHARDSON
I'm delighted to be here today to offer a special word of welcome to
Yasushi Nakamura, president of Fujitsu America Incorporated. Mr. President,
we in Texas are known for our hospitality, and I can assure you that 1 speak
for all Texans when I say we welcome you with open arms.
It's also my pleasure to recognize a Texan who gives so much of himself
to our state and to our nation: Ross Perot. Ross, we're honored to have you
with us. today.
As Ross well knows, we in Texas are very proud of our great state.
We're proud of our people and their accomplishments. For the past two years,
those accomplishments have included nothing less than a dramatic upswing in
our Texas economy.
Yes, the fortitude of our working men and women has put Texas back on
center stage in the national economic picture. Without a doubt, our economy
is on a roll and we're picking up speed, day by day.
From Sematech to the Super Collider to GTE, Texas is receiving strong
and clear signs -- signs that tell us that the rest of the world is once
again realizing that Texas has the climate necessary to nurture a growing
business, to make a break-through in science or technology and, more
importantly, to put down stakes, raise a family and build a future.
Today, we have one more such signal.
We are here today to announce another major economic development plum
for Texas.
1 am delighted to announce the decision by Fujitsu America to develop an
80 million dollar telecommunications research and manufacturing complex in
Richardson. This new facility will be one of four major manufacturing plants
that the Fujitsu America Group operates in the United States.
It will allow the company to employ 1,200 Texans by the end of 1992 and
as many as 4,500 by the turn of the century when the second phase of the
complex is completed.
The company's investment will also trigger the creation of over 7,800
indirect jobs. It will boost personal income by 298 million dollars a year
and boister the annual gross state product in Texas by 823 million dollars,
according to economist Ray Perryman of Baylor University.
It's also important to note that Fujitsu plans to use this new plant to
increase the use of American-made components in the manufacture of its
products. As the president will tell you, about half of these components
will come from companies located in Texas and other states across the nation.
Texas is currently America's second-largest exporter -- a position that
will only be enhanced by Fujitsu's plans to export some of its Texas-made
products worldwide.
Any way you look at it, Fujitsu is good for Texas. And, without a
doubt, Texas is good for Fujitsu.
The Texas expansion of such a growing, future-oriented company is
clearly indicative of the opportunity and potential within our state economy
and of our growth as a major technological center.
Mr. President, your faith in Texas is well-placed. I know the
Texas-Fujitsu partnership will be a great one. Together, we will indeed be
partners in prosperity.
FACT SHEET
FUJITSU AMERICA, INC.
Telecommunications Center in Texas
1. Fujitsu expects to employ 1,200 after completion of the $80 million
manufacturing and office complex in 1992 and to create an average of
365 jobs per year during the three-year construction phase. The
company expects to expand to 5,000 jobs when the second phase is
completed around the turn of the century.
2. Ray Perryman, economist with Baylor University, projects that the
impact on the Texas economy when Fujitsu reaches its planned
employment level of 5,000 jobs will be as follows:
a. an additional 7,825 indirect jobs for Texans generated by the
4,500 direct jobs;
b. an increase of almost $298 million in personal income per year;
and
C. an increase of about $823 million to the Gross State Product
per year.
3. The manufacturing facility will produce a variety of telecommunica-
tions and transmission products and systems, including cellular
mobile telephones, local and long distance fiber optic transmission
systems and digital cross connect products.
4. Fujitsu plans to source approximately 50% of its components from
companies located in Texas and other states.
5. Employment functions will include administration, research and
development, engineering, marketing and sales, manufacturing,
customer support and technical education.
6. Fujitsu America, with revenues at the close of its last fiscal year
(ending March 31, 1988) at approximately $1.2 billion, is the
largest subsidiary of Fujitsu Limited, Japan's largest computer
manufacturer and a world leader in semiconductor and telecommunica-
tions technology.
OFFICE OF THE GOVERNOR
FOR IMMEDIATE RELEASE
CONTACT: ROSSANNA SALAZAR
EMBARGOED UNTIL 12 NOON
JAY ROSSER
OCTOBER 31, 1988
(512) 463-1826
REMARKS BY COVERNOR BILL CLEMENTS
ANNOUNCING FORMOSA PLASTICS CORP., U.S.A., EXPANSION TO TEXAS
PORT LAVACA
With me today, as you all know, is Senator Gramm. We are also honored
to have with us the chairman of Formosa Plastics Group, Mr. Y. C. Wang, his
wife and their family, including their son and daughter: Dr. Winston Wang,
who is general manager of the plastics division of Formosa, and Susan Wang,
who is assistant to the president of Formosa Plastics Corporation, U.S.A.
I can't help but think that it's highly appropriate that this is
Halloween because Texas, is in for a great treat!
What brings us to Port Lavaca today is a common goal -- the goal of
creating new and better jobs for our people; of nurturing a stronger and
more productive economy; and building a better future for our families and
our children.
That goal is being met. From Texarkana to Midland to Point Comfort, the
Texas economy is growing. Unemployment is down from last year and the year
before. Personal income is up. Our manufacturing productivity is soaring.
And Texas has created an average 342,000 more jobs during the first three
quarters of 1988 compared to the same period in 1986.
Well, we have more good news. Today, we are here to announce another
major step in our economic turnaround and another strong sign that the Texas
economy is, indeed, on the move.
After considering a number of other sites across the nation, the U.S.
division of Formosa Plastics has decided to invest in Texas and in our
favorable business climate. Beginning next year, the company will begin
construction on a 1.3 billion dollar production facility in Point Comfort --
the largest one-time investment by a petrochemical manufacturer in Texas'
history.
Truly, this is a big day for Texas and a great day for Calhoun County!
MORE
Yes, Texas is a prudent investment. And I'm delighted that Chairman
Wang agrees.
Formosa will bring 1,500 new and permanent jobs to Texas, and as many as
4,000 more during construction. The company's investment will also trigger
the creation of nearly 8,000 indirect jobs. It will boost personal income by
230 million dollars a year and bolster the annual gross state product in
Texas by 1.8 billion dollars.
Any way you slice it, Formosa will fuel our state's ongoing economic
recovery.
To a large degree, this upswing is being led by a rebound in
manufacturing, especially in the petrochemical industry. Spurred on, in
part, by adjustments in the value of the dollar, the petrochemical sector is
operating at near capacity along the Texas Coast.
Clearly, Formosa will further enhance our production, as well as
strengthen our position as the nation's 2nd largest exporter of domestic
goods. Seventy percent of the chemical products manufactured at this
facility will be exported to markets worldwide.
Yes, the value of the dollar is a major factor in our recovery. But
there's much more to it.
Texas is boldly moving forward with the heave-ho of our working men and
women and public-private teamwork.
Since I first met with Chairman Wang, his family and his associates
earlier this year, our team has been in action. From our legislative leaders
in Austin and Washington to the Calhoun County Economic Development
Corporation, from the Texas Department of Commerce to Secretary of State Jack
Rains for his successful meeting with the chairman in Taiwan this month --
everyone pulled together in the best interest of our state. And Texas proved
once again that side-by-side, we can build for tomorrow -- today.
But special recognition is due Senator Gramm. The senator was
unfaltering in his efforts to bring Formosa to Texas, and he deserves a
lion's share of the credit for getting us where we are today.
Texas owes all of you our highest gratitude.
Senator, before I turn this over to you, let me say a special word to
the chairman.
Thank you Chairman Wang. Your confidence in Texas is well-placed. The
entire state of Texas looks forward to a long and prosperous partnership with
Formosa Plastics.
END
FACT SHEET
FORMOSA PLASTICS GROUP INVESTMENT
0
Formosa Plastics Corporation, U.S.A. investment: $1.321 billion in a petro-
chemical manufacturing facility in Point Comfort, Texas.
0
This investment decision by Formosa Plastics Corporation, U.S.A., a division
of the Taiwan-based Formosa Plastics Group, will employ 1,500 Texans and will
provide 3,000 to 4,000 jobs during the 3-year construction phase.
o
The $1.321 billion investment is the largest one-time investment in a petro-
chemical complex in Texas history (based upon records maintained by the Texas
Air Control Board).
0
This investment will have a major impact on the entire Texas economy, creat-
ing over 7,800 indirect jobs, $230 million annual increase in personal
income, and a $1.81 billion increase per year in the State Gross Product
(Source: Texas Department of Commerce).
0
Formosa officials project that construction of the facilities could begin as
early as mid-summer or fall 1989, and will take approximately three years to
complete the construction of the facilities.
0
The manufacturing complex will include eight major plants using state of the
art technology in manufacturing chemical products. Comprising over 600
acres, the complex is located on a 1,500-acre tract and will include an
electric cogeneration plant using gas-fired turbines.
o
The complex will include a 680,000 metric ton ethane cracker, as well as
plants for the production of high-density polyethylene, linear low-density
polyethylene, polypropylene, ethylene dichloride, caustic soda, and chlorine.
0
Seventy percent of the products manufactured at this new Formosa Plastics
complex will be exported throughout the world market.
0
The Formosa Plastics Group was established in 1954 with the founding of
Formosa Plastics Corporation in Taiwan. Mr. Y.C. Wang is chairman of Formosa
Plastics Group; Mr. C.T. Lee is President of Formosa Plastics Corp. U.S.A.;
Susan Wang is assistant to the president of Formosa Plastics Corp. U.S.A.;
and Dr. Winston Wang is general manager of Nan Ya Plastics, a division of
Formosa Plastics Group.
0
Formosa Plastics Corporation, U.S.A. currently has three American plants
producing vinyl chloride monomer (VCM) and polyvinyl chloride (PVC) resins
located in Delaware City, Delaware; Point Comfort, Texas; and Baton Rouge,
Louisiana.
0
Major product lines include PVC resin and related products (the company's
annual production capacity is 1.075 million metric tons, the largest in the
world); man-made fiber and textile products; and lumber products such as
plywood.
OFFICE OF THE GOVERNOR
FOR IMMEDIATE RELEASE
CONTACT: JAY ROSSER
OCTOBER 31, 1988
ROSSANNA SALAZAR
(512) 463-1826
INTERNATIONAL MANUFACTUR ING GIANT ANNOUNCES TEXAS EXPANSION
Governor Bill Clements and U.S. Sen. Phil Gramm announced
today that Formosa Plastics Corp. U.S.A., part of a
multinational chemical and plastics manufacturing conglomerate,
will build a $1.3 billion production facility in Point Comfort,
Texas.
Officials of Formosa Plastics have indicated that the
manufacturing complex will employ 1,500 Texans. In addition,
between 3,000 and 4,000 jobs will be created during the
three-year construction project.
The Formosa Plastics project represents the largest
one-time petrochemical manufacturing investment in Texas
history.
The investment will have a significant impact on the Texas
economy. An estimated 7,800 spinoff jobs are expected, along
with a $230 million annual increase in personal income.
State economic analysts are projecting that the Formosa
plant will increase the Gross State Product by $1.81 billion
annually.
The decision by Formosa Plastics Corp. U.S.A., a division
of the Taiwanese-based Formosa Plastics Group, caps months of
intense recruiting work by Clements and Gramm. Also assisting in
the recruitment effort were the Texas Department of Commerce and
the Calhoun County Economic Development Corporation.
Clements, Gramm and Y.C. Wang, chairman of Formosa Plastics
Group, met in Austin today to finalize details of the project.
"The Formosa announcement is fantastic news," Clements
said. "Formosa Plastics is contributing another chapter in our
state's textbook economic recovery efforts. We've got a
best-seller on our hands."
Gramm called the announcement "a clear sign that the Texas
economy is building momentum. We're breaking new ground for a
strong 21st century economy."
Clements said the rapidly rebounding Texas economy is proof
that the state's economic development initiatives are working.
"A variety of companies, large and small, have selected
Texas as the place to do business during the past 22 months,"
Clements added. "Two years ago people were writing the Texas
economy off. With the Formosa announcement today, we've taken
yet another giant step forward in our state's economic recovery.
"Formosa Plastics is a welcome addition to our rapidly
expanding manufacturing base. It is another example of the
strides we can make when state government leaders assume a
teamwork approach to economic development."
Texas succeeded in its recruitment efforts because it
convinced Formosa that Texas offers the greatest growth
potential in the United States, Clements said.
Gramm called the Formosa decision a "rock solid indication
that Texas is an international economic force to be reckoned
with.
"There's a growing realization in Washington that the Texas
economy is bouncing back.
"I'm proud to have played a role in bringing Formosa to
Texas," he said.
Formosa Plastics Corp. U.S.A., currently has three American
plants producing vinyl chloride monomer and polyvinyl chloride
(PVC) resins. Those plants are located in Deleware City, Del.,
Point Comfort and Baton rouge, La.
The company's annual production capacity is 1.075 million
metric tons, the largest in the world.
--30--
OFFICE OF THE COVERNOR
MONDAY, APRIL 10, 1989
CONTACT: REGGIE BASHUR
ROSSANNA SALAZAR
(512) 463-1826
REMARKS OF COVERNOR BILL CLEMENTS
TO THE TEXAS DEPARTMENT OF COMMERCE "CITIES ON THE RISE" CONFERENCE
AUSTIN
I'm delighted to join the representatives of so many of our Texas
"Cities on the Rise." You know, that theme, "Cities on the Rise," is taking
hold across our state. But as optimism translates into action and growth,
it's becoming more than just a catchy phrase. It's turning into new jobs and
brighter futures for our people -- tangible results that add up to a solid
economic upswing. And it's the hard-working men and women of our state who
deserve all the credit for the improvement.
With your support, we've made great progress in recent years. In 1987,
during the 70th Legislature, we laid the cornerstone for a new economic
resurgence. Pressed on by a nagging recession and by the desire to take our
state to new levels of opportunity and prosperity, we convinced our lawmakers
to fortify an already strong business climate.
We passed landmark legislation creating the Texas Department of Com-
merce, granting tort relief and we started on the road to trucking deregu-
lation. We cut away at the government red tape holding small business
hostage and we created the Strategic Economic Policy Commission to help us
plan for our future.
With our game plan set and with the able assistance of Ed Vetter, Bill
Lauderback and the entire Commerce Department staff, we went into action. We
went head-to-head nationally and internationally to attract major business to
1
our towns and cities. Together, we landed Sematech and Formosa Plastics,
which is going into Point Comfort, the Super Collider and Fujitsu Telecommu-
nications, Bausch & Lomb and Fruit of the Loom in Harlingen.
Then there were the hundreds of small businesses like Info Print in
Spring, Kids Mart in Sugar Land and V.I.P. Boat manufacturing in Linden.
That old saying, "The bigger the better," couldn't be further from the truth.
These businesses and your cities are proving it wrong every day. In fact, 63
percent of all new jobs created in Texas in 1987 were produced by small
business.
In all, Texas has created more than 300,000 new jobs in the past two
years and believe me, we're not through yet.
Today our mandate for economic improvement is just as great as it was in
1987, if not more SO. Yes, the recession is over, but the desire to create
new jobs, to encourage new investments, remains. And, yes, unemployment is
at its lowest level in more than four years, retail sales are up and the
economy is growing at a healthy pace, but I am here to tell you that it's
still not enough.
As President Reagan once said, "It lies in the very nature of freedom to
promote growth and prosperity."
At this time of historic transition in our economic growth, it is
imperative that we move ahead deliberately, but aggressively. This year we
have set forth an ambitious agenda to do just that, to move Texas boldly
forward.
During this legislative session, our goal is to provide tax incentives
for job creation, to further streamline government regulations that hamper
business, to make Texas even more competitive. Above all, we remain commit-
ted to our strong right-to-work laws and we stand steadfastly opposed to a
2
corporate or personal income tax. Good jobs, diversified growth and new
opportunities are our priorities and I know they're yours as well.
As we prepare to enter the 21st century, Texas must be prepared to
encourage job creators and corporate decision-makers to invest in Texas like
never before. Ours must be a commitment to promote growth, not a retreat
from growth; ours must be a promise to foster an environment that nurtures
commerce, industry and, above all, a climate that nurtures our people.
The best place to start is with the reform of our workers' compensation
system, which has businesses in Texas paying among the highest premiums in
the nation and our workers receiving some of the lowest benefits.
As I travel across our nation as your governor, working to attract new
business and industry to our state, I am invariably asked what Texas intends
to do about this faulty system. My answer to them and to you here today is
we're going to fix it. The status quo is not acceptable, not by any stretch
of the imagination.
Our workers' compensation system must be state of the art. It must be a
beacon that attracts business, not a siren that scares business off. We must
not allow our current workers' compensation statute to pull the rug out from
under the significant economic gains that we've made in the past two years.
Restoring sanity to this system, then, must begin with the elimination
of the archaic trial de novo system and by strengthening the Industrial
Accident Board. We must change lump-sum settlement procedures and allow
self-insurance with adequate safeguards.
Comprehensive reform is clearly within our reach. I'm optimistic that
we can bring premiums and benefits in line and enhance our competitiveness
nationally and abroad. That's why my first official action this legislative
3
session was to declare the workers' compensation issue an emergency that
warrants the Legislature's prompt attention.
Another critical area that demands decisive change is our state's
product liability law system. In a recent survey, economist Ray Perryman of
Baylor University found that the costs associated with Texas' liability laws
have had a negative impact on job creation and already may be undermining our
economy.
In his report, Mr. Perryman indicated that "3,200 Texas manufacturers --
employing 340,000 Texas workers -- claim to be considering stoppage of all
manufacturing operations in Texas and/or moving to another state" because of
our liability laws. In addition, the survey found that "3,000 Texas manufac-
turers have decided not to introduce a new product because of liability
considerations, while 1,500 have discontinued an existing product for the
same reason."
Certainly, lost opportunities for Texans is reason enough for change.
But there's more. In its present form, the Deceptive Trade Practices Act has
produced numerous frivolous lawsuits, swamping an already overburdened
judicial system in our state.
I'm pleased to say that changes to this law are already working their
way through the legislative process. It is our hope that by strengthening
the original intent of the Act, we will return justice to the consumers that
this law was written to protect and relieve Texas employers of an unfair
burden.
Texas is no stranger to challenge. We learned long ago that success is
tied not only to standing our ground, but to drawing on our strengths.
Economically, our geographic location is one such resource, and it's an asset
4
that we should take greater pains to promote through a goods-in-transit
exemption.
Such an exemption would free business inventories from property taxes
when these goods are only in the state temporarily, a move that would make
Texas even more attractive as a distribution center for the nation's commod-
ities and bolster our manufacturing and maquiladora industries. Texas is
clearly well-placed to benefit from these maquiladoras or twin plants.
Between June of '87 and June of '88, 129 new maquiladoras located along
the Texas-Mexico border. That's a 27 percent increase in just one year, from
470 to 599 working plants. The benefit of this industry to Texas is great
and the potential, even greater. Indeed, some 34,000 jobs could be created
in our state if we capture just 25 percent of the maquiladora parts and
supplies market.
A goods-in-transit exemption could help us reach that goal.
To provide a further incentive for job creation for all industries,
large and small, we are asking the Legislature to speed up the scheduled
phase-out of the sales and use tax now paid on manufacturing equipment. By
providing refunds for a portion of the tax payments earlier, Texas can reap
the benefits of job growth now, rather than later.
Thomas Jefferson once said, "I like dreams of the future better than the
history of the past." Well, we must not let the dreams of our future be
diminished by a lack of action. To remain competitive in today's advanced
economy, it is vital that we place greater emphasis on specialized workforce
training.
Preparing our citizens for today's highly skilled workplace, then,
requires that we create a more substantial and flexible Workforce Development
Incentive Program. With it, we can provide specific, fast-track training in
5
new and developing fields, and, at the same time, offer those industries our
greatest incentive -- our talented people.
In sum, these are our economic goals for the 71st Legislature. More
than simply a series of proposals, our agenda embodies our hope for the years
to come. With your support it can be more than a strategy. It can give us a
sharp edge as we compete nationally and internationally for new investments,
as we work to underscore our base. It can mean more jobs, enhanced diversi-
fication and greater opportunities for all Texans. It can ready our state
for another century of progress.
A healthy economy makes all things possible. With it, our people
prosper, revenue is available for our schools and for human services. With
it, we can turn our dreams into reality. When all is said and done, building
a stronger Texas and nurturing a better future for our families is our common
goal and will be our greatest achievement.
Let me conclude with this: I've talked to you about how far Texas has
come and how far we can go. Critical to all of this is you and the cities
that you represent. You offer ingenuity, leadership and the Texas can-do
spirit, qualities that built and continue to strengthen our great state.
Together, shoulder-to-shoulder and with an eye toward the 21st century,
we can reshape the face of Texas.
END
Press
THE ECONOMY
TEXAS FACES UP TO
A TOUGHER FUTURE
Swagger and grit were fine when the oil was gushing. Now Texas must deal with down-to-earth
problems like an antiquated state government.
by John Paul Newport Jr.
Houston Mayor Kathy Whitmire epitomizes the new Texas leadership-young. open-minded, willing to work with all interest groups.
I anyone nov. ,nt did
EXANS these past few years have
price vacillates erratically with worldwide
Metroplex. It would be a new type of in-
T
been feeling lower than a snake's
supply and demand. Its recovery depends
dustrial airport, with a runway ringed by
belly in a wagon rut, but slowly
to an uncomfortable degree on infusions of
manufacturing plants that would receive
they're returning to form. That is to
outside capital. To become self-reliant, Tex-
raw materials and send finished goods, all
say, they're bragging again. While taxpay-
as must above all learn to compete without
by plane. Perot collared municipal offi-
ers in the rest of the country grouse about
the boost that oil has given it in the past. It
cials, pulled strings, pushed through per-
all the money they have to ship in to bail
must accept that for a while at least it will
mits in double time, and cajoled neighbor-
out the state's savings and loans, Texans are
resemble other states far more than it will
ing landowners (including IBM) to donate
talking about Fujitsu and GTE moving to
differ from them, forced to build brick-by-
rights of way for highways to serve the
Dallas, about Waxahachie winning the
brick rather than gusher-by-gusher. "What
north Fort Worth facility. Now he expects
$4 billion superconducting supercollider,
really makes the recovery happen is an en-
the runway to open late this year-a mi-
about biomedical company startups in
vironment in which small-business people
raculously brief three years after concep-
Houston, and about a new computer con-
are willing to take risks," says Kathy Whit-
tion. Drawls Perot: "If a Texan wants to do
sortium called Sematech choosing Austin
mire, mayor of Houston.
something, he goes out and does it."
as its home. "The phenome-
But the truth is that the
nal resilience of this state is
airport, for all its potential,
astounding," rhapsodizes
has yet to sign a paying ten-
Governor William P. Cle-
ant and has progressed as far
ments Jr. in his office at the
as it has partly with the
capitol in Austin. "In the
backing of Daddy's money.
two short years since Texas
That makes it less a model
hit bottom, we have turned
for the new Texas than a
this economy around."
vestige of the good old days.
The comment should be
The money came from com-
commended more for its
puters, but otherwise it's
spirit than for its accuracy.
similar in nature to the aber-
The unemployment rate-
rantly large sums that fueled
7.1%-is indeed down al-
Texans' speculations in the
most three points from its
oil era and that will be rare
peak in June 1986, and the
in the days ahead.
gross state product should
It is difficult to exaggerate
go up this year by 2.4%. But
the role that oil has played in
for a state that considers it-
shaping Texas's sense of pos-
self only temporarily off the
sibility. Wealth from oil has
fast track, a growth rate that
enriched the lives and life-
slow and an unemployment
styles of millions of Texans,
rate 1.7 points above the na-
supplied more than a quarter
tion's are hardly a solid
of the state's tax revenue in
turnaround.
recent years, and endowed a
Statistics are just a piece
strong university system.
of the story. The oil and
Take away oil from Texas's
banking debacle has wiped
Ross Perot Jr. at his airport site: a chip off the old block or the new?
past and you've got an over-
out a big chunk of the state's
size Mississippi. Take it away
business leadership. Ghostly buildings fin-
Most Texans acknowledge that some
suddenly, as happened in the mid-1980s,
ished but never occupied remain a daunting
changes are required. But it may be that too
and that famed Texas optimism collapses
reminder of past excesses. If a lot of North-
many are counting too much on some
into a crisis of almost biblical proportion.
ern city slickers got suckered into financing
quasimystical quality in the Texas personal-
Oil and gas will continue to be a vital, if
the last Texas bubble, they will be all the
ity-swagger, spunk, true grit-to pull the
far less dominant, sector of the Texas econo-
more leery of funding the next one. And
state through unaided. A number of state
my for years to come. Energy today accounts
then come the real problems: a state govern-
leaders point to Ross Perot Jr. as an exam-
for some 15% of the state's economic activi-
ment still mired in its rural past, a confused
ple of how that old Texas brio can flourish
ty, making it more important to Texas than
tax system, a education system. and in-
in a new Texas era.
California's biggest industry, aerospace, is
sufficient effort to bring a growing Hispanic
to that state. Houston's role as the world's
minority into the mainstream.
EROT, 30, is the son of the data-
energy capital seems secure as domestic
The state in many ways resembles a
Third World nation, argues Bernard Wein-
P
processing billionaire, who is the
drilling operations consolidate there and
closest thing Texans have these
international exploration continues apace.
stein, an economist at Southern Methodist
days to a hero. About two years
The state has a 65-year supply of natural gas.
University. Its prosperity remains signifi-
ago young Perot decided to build himself
Because it pollutes far less than other hydro-
cantly linked to a commodity, oil, whose
an airport, a wildcat project really, right in
carbons, gas may enjoy a resurgence.
REPORTER ASSOCIATE Rosalind Klein Berlin
the middle of the Dallas-Fort Worth
Nevertheless, the true future for Texas,
MARCH 13, 1989 FORTUNE 103
Impumie
Kylins of empty building
squeezed by the crunch have been small
and medium-size companies that are un-
able to tap the money-center banks.
The worst of the problem is probably be-
hind. Out-of-state concerns have now ac-
quired four of the state's five major bank
holding companies, and negotiations on the
fifth, Dallas-based MCorp, are under way.
Last July, NCNB, the North Carolina
banking juggernaut, took over the biggest
Texas financial institution, First Republic-
Bank in Dallas. After spending the first few
months in the file room, NCNB now claims
to be beating the bushes for new business.
Buddy Kemp, the troubleshooter dis-
patched from North Carolina to run
NCNB Texas, says the bank has $2 billion
to $3 billion it would like to lend in Texas
this year. He doesn't expect to find enough
takers: "It's still a difficult, traumatized
market."
EAL ESTATE is a sadder tale. Of-
R
fice vacancy rates in Dallas, Hous-
ton, and Austin still hover in the
30% range. Another round, prob-
Buddy Kemp: A North Carolinian now watches the vault at the biggest little bank in Texas.
ably the last, of large bankruptcies and fore-
closures is possible this year. Many
as for most states, lies in economic diversi-
thanks to the 55,000-employee Texas Medi-
economists project that five to seven years
fication. The chief advantages Texas brings
cal Center, and in space industries, thanks
must pass before the overhang disappears.
to the competition are a strategic midcon-
to the NASA Space Center.
That will slow related businesses.
tinent location: superb highways, airports,
The outbreak of braggadocio notwith-
Texas's most significant development ef-
and harbors; and a largely non-union labor
standing, Texans are still reeling. They see
fort goes into hustling desirable out-of-state
force that is expected to grow smartly for
strange, out-of-state names on their banks.
businesses. Texas came late to company
decades. John Roach. chief executive of
They leaf through page after page of news-
hunting, but now it's a religion. Notes Ray
Fort Worth-based Tandy, ranks Texas's
paper ads hawking foreclosed properties.
Perryman, a Baylor University economist
work ethic as its greatest strength. "And for
"We're still in a state of shell shock regard-
and business consultant: "Every little town
all the negatives you hear about education,
ing the debacle of our financial institutions
in the state now has some kind of organiza-
we've never failed to find the workers we
and real estate," avers Ray Hunt, one of oil-
tion, and they always ask, 'How can we
needed in Texas, at every level and at com-
man H. L. Hunt's 12 living children-one
bring high tech here?' Well, they probably
petitive wages." he says. Indeed, the aver-
who didn't lose his money-and a Dallas
can't, but they can get smarter about work-
age hourly pay for factory workers in the
civic leader. "Though I would predict this
ing with what they've got."
state is $9.85. vs. more than $12 in some
psychology, when it turns. could turn on a
Texas has notched some recent victories.
leading industrial states. Just north of the
dime. for now I rank lack of confidence as
Last December, for instance, Fujitsu an-
Mexico border. Texas factories generally
Texas's biggest problem." Newspaper pub-
nounced an expansion of its electronics fac-
offer $6 or less.
lisher Robert Decherd, chairman of Dal-
tory near Dallas that will result in an
las's A.H. Belo Corp., says self-doubt is
additional 5,000 jobs, and Fruit of the
EXAS ALSO has an enviable-and
T
slowing the recovery: "If people don't be-
Loom said it would build a plant in the Rio
to some people surprising-tech-
lieve change and progress are achievable.
Grande Valley to employ 3,200 to make
nological base. Dallas-Fort Worth
they won't invest. It's as if they're standing
clothes. The plant is part of an effort to do
ranks among the top four regions in
in the middle of an eddy. unsure of which
more downstream processing of the raw
its concentration of high-tech industries
way to go."
materials the state produces: Texas is the
(with Los Angeles, San Francisco. and Bos-
The disintegration of the state's banking
nation's No. 1 cotton producer but has rela-
ton). Specialties include telecommunica-
and real estate industries has hurt badly.
tively few textile plants.
tions, computers, precision instruments.
Account officers at banks spend their time
Economic development will not work
and aerospace. Houston's petrochemical
working out bad loans rather than making
magic. In the first place, the number of di-
plants are running flat out. and exports
new ones. Says Texas Attorney General
rect new jobs created by the major reloca-
through the ship channel are 25% in the
lim Mattox: "It's got to the point where
tions announced in 1988 (a banner year)
past two years. The area is also well post-
you can get a loan only by proving that you
totals less than 0.3% of the Texas employ-
tioned to become a leader in biomedicine.
don't need the money. Most seriously
ment base. Small businesses create the
THE ECONOMY
lion's share of new jobs, typically 70%, but
headquarters-and 4,000 jobs-in Las Co-
turing. "Essentially we have a 1960s tax
in small increments. "You can't build your
linas near Dallas. Overbuilding during the
system trying to drive a 1980s and 1990s
future just by begging companies to relo-
real estate delusion of the early 1980s creat-
economy," argues Dan Morales, a rising
cate to Texas." observes Department of
ed this valuable asset for the state-and the
young state representative from San Anto-
Commerce Chairman Edward Vetter.
rest of the country is paying for it with ev-
nio who served on a special committee to
In the second place, to win those reloca-
ery bailout of a Texas lending institution.
review the tax situation.
tions local communities sometimes have to
Masked by these occasionally pyrrhic
Another big problem-one legislators
sell the farm. Tax abatements and waivers of
economic development victories is a busi-
have said they want to fix in the current
environmental regulations are common
ness climate less hospitable than many
session-is workers' compensation. The in-
surance rates have doubled since 1985,
partly because of a legal system many com-
panies perceive to be excessively politi-
cized (Texans elect their judges on partisan
tickets), pro-plaintiff, and capricious-dra-
matically symbolized by the $11 billion
jury award in the 1985 Texaco-Pennzoil
case. The high cost of cozily protected in-
trastate trucking is a drawback.
The key to pushing through changes on
these issues, as well as to ensuring the long-
term viability of the Texas economy in gen-
eral, is leadership. But ironically, at a time
when Texas's national political clout is at a
zenith-a semi-Texan in the White House,
Texans in the Cabinet, a Speaker of the
House from Fort Worth, four Texans chair-
ing important congressional committees-
the leadership back home is spotty at best.
Washington influence may help the state in
specific instances, such as securing full
funding for the superconducting supercol-
lider, but the real work of recovery must
take place on Texas soil.
EADERSHIP logically should start
L
with the state government, but in a
leave-me-alone state like Texas the
government is anything but vision-
ary. The legislature ordinarily convenes just
six months every two years, and despite a
population that is four-fifths urban, it dis-
plays an ornery rural bias on issues affect-
ing business and education. Clements has
Bob Lanier: success in dealing with one of the post-oil rush problems-transportation
ardently championed business interests, but
the governor's position is not as powerful in
practice. To persuade Compaq Computer to
Texans and outsiders believe. Civic leaders
Texas as in some states, and he says he
expand its facilities last year. Houston-area
invariably pitch Texas as a low-tax state.
won't run for reelection in 1990. Texas
business leaders had to offer $15 million in
In the aggregate that is correct: the state
lacks any politician capable of igniting pub-
tax abatements. guarantee $15.5 million in
and local taxman's per capita take in Texas
lic opinion. San Antonio Mayor Henry Cis-
electricity discounts and job-training assis-
is 15th-lowest in the U.S. But thanks in
neros, probably the state's most charismatic
tance, and promise to widen a local road
part to the absence of a personal income
leader, is leaving public life-at least tem-
into a ten-lane limited-access highway.
tax and the traditionally deep pockets of
porarily-in the wake of publicity about a
Contrast that with Southern California.
the oil industry. businesses in Texas foot
love affair. State Treasurer Ann Richards,
where developers don't get incentives and
63% of that bill. Moreover. the tax code is
whose "Poor George" keynote address at
often must build such things themselves.
riddled with arbitrary tenets that allow
last summer's Democratic convention cre-
Texas has one peculiar advantage that
partnerships to escape much of the busi-
ated a buzz, may be too liberal to unify the
helps it enormously in the economic devel-
ness tax. Service businesses pay in aggre-
state behind her. The Republicans are so
opment racket: cheap. cheap real estate.
date only a third is much as manufacturing
hard up they have whispered of drafting
GTE cited low rent as a factor in deciding
companies, even though services now gen-
George Walker Bush, who dropped out of
to consolidate its telephone operations
erate twice as much activity as manufac-
the oil business for a full-time slot in his
THE ECONOMY
father's presidential campaign, to ride those
powerful Texans included six bankers in
have to go forward to get the job done."
coattails into the governor's mansion. Out-
1976, half as many in 1987-and in those
At the state level such cohesiveness is
side of Midland, where he once ran unsuc-
three cases, their institutions have since dis-
harder to achieve, but one issue with the
cessfully for Congress, he's scarcely known.
appeared or are in deep trouble. Not only
potential to unify is education. Revenues
In the past Texas's most inspired leader-
the bankers are "out of play," says Bayard
from $15 billion in state oil and gas proper-
ship came from the business community,
Friedman, a former Fort Worth mayor and
ties must by law go to education. and the
but those ranks have been decimated. Texas
retired chairman of Texas American Bank.
state university system is first-rate. The
Monthly magazine's list of the 20 most
"The same goes for a lot of the independent
problem is in the public schools. In 1987
oil people and the major real estate devel-
$300
Billions of 1982 dollars
opers. The power structure that existed in
this state five or six years ago is just gone."
The new power structure will include more
and younger entrepreneurs and high-tech
executives. Rod Canion, chief executive of
$275
Compaq Computer in Houston, allows that
the economic crash "has accelerated the
transition in Texas to a new generation of
leaders, a generation whose key quality will
be openness to change." Signifying this
$250
change, both the mayor of Houston and the
Gross state product
president of its chamber of commerce are
women in their early 40s.
On the other hand, when an old oligar-
$225
chy slips from power before a new genera-
tion finds its legs, the leadership vacuum
30%
can be telling. Last June, Dallas voters de-
Energy as a percent
feated a $2.9 billion transportation plan.
of gross state product
Critics charged that the plan primarily ben-
Ray Hunt: The big loss has been confidence.
efited the central business district. Its orga-
nizers, top-heavy with representatives from
Texas ranked 46th of 50 states in the average
25%
downtown Dallas, failed to satisfy the
score on SAT college-entrance exams.
needs of residents in the 15 outlying mu-
Among Hispanics the high school dropout
nicipalities. Organizers also failed to attract
rate is nearly 50%-almost double the rate
support from the estranged minorities who
for Anglos. This trend is alarming because
constitute half the city's population.
demographers predict that in the middle of
the next century Hispanics will outnumber
20%
UST SIX MONTHS earlier, Houston
Anglos in Texas. State Representative Eddie
area voters approved a regional trans-
Cavazos, a Hispanic leader from Corpus
portation plan by a comfortable mar-
Christi, sums up the issue: "Depending on
gin. In part that reflected the earlier
education, Hispanics will either be part of
15%
annexation of some suburbs and better re-
the system or wards of the system."
lations with minorities. But the decisive
In 1984 a campaign by Ross Perot Sr.
10%
factor was leadership. After the 1983 defeat
helped to inspire a special session of the
of a previous plan, a so-called Super Group
state legislature on education reform.
began meeting informally to prepare the
Among the bills passed were controversial
Unemployment rate
next attempt. The small alliance included a
measures mandating teacher testing and
few businessmen, Houston Mayor Kathy
less flaccid academic standards for high
8%
Whitmire, the chief county executive, and
school athletes. Since then the fervor has
a local real estate developer named Bob La-
flagged. In terms of test scores and compar-
nier, who headed the Texas Highway De-
ative ranking in funding per student, Texas
partment from 1983 to 1987. In the 11th
is now backsliding on education, and no
hour Lanier helped broker a deal-saving
new Ross Perots have emerged to lead the
6%
compromise that made limited rail service
cause. Admittedly, the state has faced con-
SOURCE TEXAS STATE COMPTROLLER'S OFF
part of the plan. Says he: "If the second
suming problems of late. But if Texans and
choice is acceptable, sometimes you just
their leaders want to have things to brag
about over the next few decades, education
4%
BACK FROM THE BOTTOM
would seem to be the litmus issue. It is a
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
The beginnings of a recovery have reduced
good example of the basic building process
unemployment while the influence of energy
needed throughout the Texas economy to
on the state continues to diminish.
realize its rich potential.
F
112 FORTUNE MARCH 13, 1989
Statistics lag lands P2D Dallas on
MAR 17 1989
NEWS
hot cities' list
The
Dallas-Fort
on the economists' charts start pointing up
Oak and St. Paul.
Worth area - for the
again, statistical studies that show a four-year
Duddleston Management Co. of Houston is
third year in a row -
spread of job growth numbers will say that
trying to get a handle on how to market the two-
has wound up near the
things are rotten in Dallas-Fort Worth.
building skyscraper complex - either for
top of one of those
So when surveys like Inc.'s say that the hot-
tenants or a sale.
much-touted rankings of
test city in America this year is going to be
NCNB Texas National Bank is moving its oper-
America's fastest grow-
the envelope, please
Manchester, New Hamp-
ations out of the old Republic complex to build-
ing cities.
shire.
ings in the west side of downtown.
That's right. With
Well, let's not go running off to the airport,
Leasing agents don't expect much of a rush
bankruptcy and foreclo-
STEVE
just yet.
by downtown tenants to refill the 30-year-old
sure rates at an all-time
BROWN
office space.
high and unemployment
REAL ESTATE
And the cost of asbestos removal has fright-
running at more than a
No, it isn't a big deal.
ened off some buyers.
point above the national average, Inc. magazine
What's $7.4 million among the billions and
still considers Dallas-Fort Worth a "hot spot" for
billions of real estate dollars ground up in the
1989.
Texas foreclosure mill?
Robert Bagwell must feel like he stumbled
Not that anyone is calling up Inc. to complain.
But this month's foreclosure on a $7.4 million
into a time warp.
But our local real estate developers and bankers
Richardson industrial complex raised a few eye-
Since the early 1980s, Mr. Bagwell has been a
can't stand much more of this fast growth.
brows down at the courthouse steps.
developer and broker in Dallas' West End - the
So what's the deal? How did Dallas-Fort
Aetna Life Insurance foreclosed on the prop-
collection of turn-of-the-century brick buildings
Worth wind up ranked 26th among the nation's
erty. The owner - until March 7 - was Tram-
on downtown's northwest corner.
200 largest cities in a comparison of job growth
mell Crow Co.
Mr. Bagwell was a partner in the redevelop-
and business formations?.
Crow Co. has so far avoided the monthly fore-
ment of several of the historic buildings - in-
The same survey ranked Austin ninth among
closure auctions. While other big builders like
cluding the West End Marketplace. But these
these "hot" cities.
Lincoln, Vantage and Hines have let uneconomi-
days his real estate expertise is being used light
cal projects fall into foreclosure, Crow had re-
It all depends on how you read the numbers.
years beyond the West End.
mained out of the fray.
The magazine's March ranking uses a spread
Mr. Bagwell has moved to Northern Califor-
Officials with Aetna confirmed the foreclo-
of statistics from January 1984 to July 1988. And
nia to go to work for Skywalker Development Co.
sure of the multibuilding complex at Interna-
it wasn't until 1986 that the statistics began to
- the real estate development subsidiary of Lu-
tional Parkway and Apollo Road. A Crow Co.
catch up with bad times in Big D.
casfilm Ltd., creator of the hit Star Wars and In-
spokesman said that the foreclosure was by mu-
diana Jones movie sagas.
The high growth rates Dallas-Fort Worth en-
tual agreement of the developer and the lender.
Lucasfilm's real estate arm is designing fu-
joyed in 1984 and 1985 are putting a spin on the
turistic entertainment and retail developments
growth profile.
that utilize some of the high-tech special effects
And the same kind of statistical lag will pres-
Dallas real estate brokerage firms are casting
and sets made popular in the Star Wars movies.
ent just as inaccurate a picture of conditions in
dirty glances at the latest large property assign-
One project Skywalker Development is study-
the area a year or so from now when the econ-
ment in downtown Dallas. Federal regulators
ing is in downtown Houston.
omy has recovered.
signed a Houston developer to handle the dispo-
Steve Brown is Real Estate Editor of The Dal-
Even after the market turns and the arrows
sition of the old Republic Bank complex at Live
las Morning News.
Jobless rate
drops to
15-year low
points after several months of
rising unemployment. The state's
unemployment was down from
8. percent a year ago, but still
ranked as the highest among the
Texas unemployment
nation's 11 largest state's.
"Even though we're still doing
follows national trend
well, we've got a way to go be-
fore we can say our expansion
matches the national average,"
FROM STAFF AND WIRE REPORTS 3-11
said Nic Santangelo, chief of eco-
nomic analysis for the bureau's
The nation's unemployment dropped to a 15-year
Southwest regional office.
low of 5.1 percent in February as employers created
289,000 jobs, the government said Friday in a report
The humber of unemployed
cited as evidence of surprising, sustained vigor in
Texans dropped in February to
the economy.
551,000, compared with 673,000
Texas unemployment also fell sharply from 7.1
unemployed in February 1988
percent in January to 6.7 percent in February. the
and 590,000 unemployed in Jan-
lowest level since July, the Bureau of Labor Statis-
uary, the bureau reported.
tics reported.
Wall Street seemed to regard the strong unem-
ployment drop as an indication that economic
growth is too vigorous as stock prices fell. Analysts
cited concerns
the Federal Re-
serve Board
Unemployment
may raise inter-
Percent of work force,
est rates to cool
seasonally adjusted
down the econ-
omy as employ-
10%
ers bid up wage
Texas:
9
rates in an ev-
6.7%
er-tightening la-
bor market.
8
A record 62.9
percent of the
7
working-age
population was
6
at work last
month. match-
5
ing the high set
in January, the
4
department
said in data cal-
U.S.:
3
culated from its
5.1%
monthly house-
2
hold survey.
The nation's
1
jobless rate.
stuck at 5.3 per-
cent or 5.4 per-
O
MAMJJASONDJF
cent for five
1988
1989
months. fell 0.3
percentage
SOURCE: Labor Department
point in Febru-
ary to 5.1 percent, its lowest since May 1974. The
last time the rate was lower was in December 1973.
when it hit 4.9 percent.
The gain of 289.000 non-farm jobs in February
reflected improved conditions in service-producing
industries, such as health care and retail trade. ac-
cording to a separate survey of business payrolls.
February's job gains. although strong, were off
from January's huge increase of 415,000 jobs. Last
month's harsh weather cut 22,000 jobs from con-
struction employment. Manufacturing jobs were
down 8,000 after rising steadily since September.
Those decreases were more than made up for by
a gain of 321.000 jobs in the service sector of the
economy, including gains in health and business
services and in retail trade.
In Texas the jobless rate fell 0.4 percentage
Please see JOBS, C-2
14
Permian's future
tied to recovery,
drilling technology
ASSOCIATED PRESS
tion, the Permian Basin stands to
become the tertiary capital of the
MIDLAND - The fate of
world - if it does not already
Permian Basin oil fields will de-
own that title.
pend on technology now unfold-
While CO₂ projects are not ex-
ing and yet to unfold, say industry
actly new technology to the
experts.
Permian Basin, the recent mar-
With exploration for major re-
riage of new computers to the
serves in the Permian Basin pret-
process is making it a new, high-
ty much in the past and produc-
ly efficient ballgame. The wide-
tion fairly mature, one
spread use of artificial intelligence
technological approach the Perm-
could make it a new world in pe-
ian Basin will increasingly count
troleum production.
on is exploitation, says Richard
Operators of tertiary projects
Morrow, chairman of Amoco
are now able to use computers to
Corp.
stimulate reservoir performance
Exploitation is simply the use
and optimize injection rates. The
of technology and efficiency to
same computers also improve
maximize the recovery of present
sweep efficiency within the reser-
crude oil reserves.
voir. With sophisticated computer
There are currently 300 billion
programs, engineers are able to
barrels of oil in the United States
map accurately complex produc-
that has already been discovered
tion structures below the Earth's
and is in place. But energy ex-
surface and avoid trapping oil.
perts predict that only 10 percent
Computers also are opening
of this amount can be recovered
the door to improve the stimula-
with the present state-of-the-art
tion and completion techniques.
technology.
Last month the Society of Petro-
Addressing the problem of de-
leum Engineers, meeting in
clining production at a Midland
Houston, sponsored an interna-
conference last year. Morrow said
tional symposium on reservoir
the industry should make wider
stimulation. in which 36 papers
use of exploitation teams.
were submitted on using comput-
He said these teams would be
er methods to stimulate the flow
interdisciplinary with talents in
of injected chemicals, gases and
geology. geophysics and engi-
other agents into oil and gas for-
neering. Their purpose is to focus
mations.
on areas in and around existing
A recovery technique that has
fields to extend the limits of exist-
been applied in the Permian Ba-
ing reservoirs. identify new pro-
sin in only a minor way is Micro-
ducing horizons. and remap res-
bial Enhanced Oil Recovery. Still
ervoirs to achieve better drainage.
undergoing pilot studies as a re-
Morrow savs up to 60 percent
covery process. microbes have
of reserve additions in the past
been used in the Permian Basin
five years have been through ex-
as a means to control paraffin in
ploitation efforts.
oil wells.
Morrow and others in the in-
MEOR. which uses oil-digest-
dustry are also calling for an all-
ing germs to produce heat. pres-
out push to develop new tech-
sure. carbon dioxide and surfac-
nology to tap passed-over
tant chemicals in oil wells, may be
reserves. But the industry. even
the next round of recovery after
without a cail. is already respond-
carbon dioxide projects. It has
ing to the obvious need to find
proven highly effective in stimu-
technology beyond today's con-
lating oil mobility and can pene-
ventional recovery methods. And
trate low permeability zones in
some of that advanced technology
reservoirs.
is already showing up in the
Significant technological ad-
Permian Basin.
vances that could increase pro-
One such technology is tertiary
duction and decrease costs are
recovery. primarily CO, projects
also being made in drilling with
in the Permian Basin. With over
new horizontal and high-speed
25 carbon dioxide floods in opera-
drilling techniques.
17
ECONOMIC report
Corporate flow
TYPICAL CORPORATE TRANSFEREE
Transferee
Transferee
elsewhere
Characteristic
to Texas
5
in U.S.
P.ID
Pige
38
38.5
going to Texas
Male
84.0%
84.0%
Married
86.1%
88.0%
MAR 1 6 1989
Children
84.2%
82.0%
And Dallas is top destination
Spouse employed
62.0%
48.0%
Full-time
employment
86.5%
67.0%
By Kevin B. Blackistone
The last Homequity survey,
Department:
Staff Writer of The Dallas Morning News
done in 1986 in the midst of the
Sales
26.3%
21.0%
oil-price crash that precipitated
Engineering
11.4%
17.0%
orporate America, once
the deflation of the Texas
Finance
9.6%
10.0%
C
again, is moving more
economy, showed that 1,935
Reason for transfer:
people into Texas than out
families relocated to metropolitan
Promotion
47.8%
59.0%
of it, according a study by the
Dallas while 2,187 families packed
Lateral move
30.4%
41.0%
nation's largest relocation
their bags for greener pastures.
Number of times
company. And the Dallas area
The chief economist of J.C.
transferred
3.6
2.9
leads U.S. metropolitan
Penney Co., which relocated in
Frequency of
communities in the number of
1987 to the Dallas area from New
transfer by years
4.0
4.4
out-of-state arrivals.
York, said the analysis is further
SOURCE: PHH Homequity
A survey of corporate
evidence that the fortunes of
transferees conducted by PHH
Texas and Dallas are turning for
The Dallas Morning News
Homequity, a Connecticut-based
the better.
is the New York metropolitan
for Homequity in Las Colinas.
real estate services company that
Penney economist Ira Silver
area is so expensive.
A Homequity executive, who
assists on more business
said more corporations today
"Most of the people they
assisted Penney in making its
relocations and expansions to
realize they can reduce expenses
(major corporations) want to
move to the Dallas area, said that
new venues than any other U.S.
and develop better managerial
develop, they have to move. And
most of the families relocating to
firm, showed that in 1988 it
talent in less-expensive, centrally
you can lose some very good
Dallas from out of state were, in
moved more families - 4,278 - to
located areas such as Dallas
people if they are not willing to
fact, departing communities in
metropolitan Dallas than to any
rather than traditional, but very
make a move," Mr. Silver
the Northeast.
of the 75 other areas in the nation
expensive, posts on the East
explained.
"Outside of Texas, most of our
they serve.
Coast.
"The need for American
moves are from the New York-
Homequity, which has an
"One attraction (in Dallas) is
corporations to look at how they
Connecticut corridor," said
office in Las Colinas, also moved
lower taxes, which reduces our
spend their money and operate
Andrew D. Bardach, national
2,718 families out of the Dallas
operating expenses," Mr. Silver
more efficiently is a big economic
account executive for Homequity
community in 1988. Dallas ranked
said. "It was also getting very
decision. That makes this a very
in Las Colinas. "There's been
fifth in departures, the company's
difficult to transfer people into
attractive area," said J. Kevin
such a dichotomy in living
study indicated.
the New York area. The problem
Raney, director of client relations
Please see CORPORATE on Page 12D.
Corporate flow going to Texas
Continued from Page 1D.
vice president and general mana-
which made this area a less expen-
panies and their employees.
expenses between the Southwest
ger for Homequity in Las Colinas.
sive place to work and live.
And publicity about Texas
and the Northeast over the last few
Until recently, Homequity execu-
"The forces that give you prob-
through national conventions that
years that the Dallas environment
tives said, most of the corporate
lems, in the end, give you benefits,
set up in Houston and Dallas, Home-
becomes very attractive."
moves to Dallas involved expan-
and vice versa," Mr. Silver said.
quity executives said, have allowed
Homequity also showed the typi-
sions of small offices. Today, they
"The good luck and fast growth the
corporate decision-makers to see
cal family transferring to Texas was
said, they are handling more and
Northeast experienced has started
the state as more than just prairies
more likely than a family transfer-
more large division and headquar-
to give it problems. And you're
and oil fields.
ing to another state to be headed by
ter moves, such as J.C. Penney, Oc-
starting to see turnaround numbers
"A few years ago people looked at
a 38-year-old male sales executive
cidental Chemical and GTE Corp.'s
for the Southwest - because of its
this place as Lonesome Dove - COV-
with a working wife and one child.
telephone operations unit, all of
problems."
ered wagons and prairies," Bardach
And the executive probably decided
which moved to the Dallas area in
Mr. Silver said statistics such as
said. "But now, with all the conven-
to move to Texas because the move
the past two years.
depressed real estate prices and an
tions here, they see it's not. We're
included a promotion, according to
The study stated that transferees
unemployment rate that is higher
getting New York and California
Homequity.
out of Texas were most probably
than the national average make
banks, and they see that as meaning
Homequity executives said most
leaving a job in financial services,
Texas a more better place for com-
we're sophisticated."
of the corporations they helped
one of Texas' industries that has
move to Dallas were in the service
suffered the most during the eco-
sector, the fastest-growing em-
nomic turndown of the past two
ployer in the U.S. economy.
years.
"We do have a high number of
Mr. Silver said the Homequity
oil companies, but we are seeing a
data illustrate that Texas actually is
lot of high-tech and retail compa-
benefitting from the natural ebb
nies," said Gary P. Cunningham,
and flow of the regional economy,
ECONOMIC REPORT
1989
METROPOLIT
Year to year economic growth, in percent
1
HOUSTON
14%
12
12
10
10
6
2.18 2.45*
2
0
2
2.00
bine
in
elned
Forecasts
The Dallas Morning News
MAR 09 1989
Texas economy rebounding, report says
By Kevin B. Blackistone
the state's largest city and that of Texas will
will go all right this year.
Staff Writer of The Dallas Morning News
expand at their fastest pace since 1984, when
"I really do believe that this is the year that
ouston - which for the past few years
both were still riding the crest of high oil
capital availability comes back. The only
H
suffered more than any Texas
prices.
question is whether they will lend to small
metropolis after collapsed oil prices
In addition, the analysis expects the most
business," Mr. Hockenyos said. "And I do think
dragged the state economy into a deep hole
robust economic growth since 1985 for the
interest rates will come down - by Labor Day.
this year should lead what will be the state's
state's second-largest city, Dallas, and for the
That's based on our judgment of the political
Fort Worth metropolitan area.
needs of the current administration."
strongest economic growth in half a decade,
"Some of that's just statistics when you're
Mr. Hockenyos and co-publisher Travis C.
according to a new analysis from an Austin-
coming off the bottom," said Jon Hockenyos,
Tullos project the state economy expanding by
based economic forecasting service.
In its just-released report, Texas
economist and publisher of the Texas
1.69 percent in 1989 after recording two
Perspectives Inc. forecasts that the economy of
Perspectives report. "But we do think things
Please see TEXAS on Page 4D.
Texas economy rebounding, report says
Continued from Page 1D.
search will spur the overall Austin
consecutive years of flatness and
"The big variable is whether we get a recession. I
economic recovery, which jibes
contracting by 4.08 percent in 1986.
don't think we'll see one. And if we continue
with new projections from the Aus-
They also foresee the state economy
tin Chamber of Commmerce.
growing in 1990 even if the national
without one, we'll outperform the nation."
"The sector that is leading the
economy enters a recession, which
- Don Reynolds, president,
economy is manufacturing. particu-
at least three out of every four
members of the National Associa-
21st Century Forecasting
larly exports of durable goods," said
Angelos Angelou, chief economist
tion of Business Economists pre-
at the Austin Chamber, who fore-
dicts.
in 1989 by 1.47 percent, which
think we'll see one. And if we con-
casts 1.1 percent growth in the Aus-
M. Ray Perryman, director of
would be its largest gain since 1985,
tinue without one, we'll outperform
tin economy this year. "Seventy per-
Baylor University Forecasting Ser-
predict Mr. Hockenyos and Mr. Tul-
the nation."
cent of our manufacturing is high-
vice. in Waco and a consultant to
los.
Mr. Reynolds said that beyond
tech, and that's R&D (research and
Texas Perspectives, concurred with
The economists do not expect
growth in defense and aerospace in
development) driven."
his Austin colleagues. But he cau-
the severe problems that beset Dal-
Fort Worth. he expects a pickup in
tioned: "What we (Texas) can't
las' banking and thrift industries to
property absorption rates and in
Mr. Angelou predicts Austin this
stand is any runup in the dollar, be-
disappear entirely this year, but
new construction.
year will take in nearly $1 billion in
cause everything (in the recovery)
they do envision corporate reloca-
The economy in the capital city,
R&D funding.
is so export-driven."
tions - like the move of GTE
Austin, also should realize growth
With the major urban areas in
Mr. Hockenyos and Mr. Tullos
Corp.'s telephone operations divi-
this year, according to the Texas
Texas expected to do better to-
note. in fact, that it is the decline in
sion to Irving - and business ex-
Perspective soothsayers. They
gether in 1989, it is no surprise then
the value of the dollar against for-
pansions providing a new infusion
project 1.21 percent growth in Aus-
that most economists here believe
eign currencies that is most respon-
of capital and commerce.
tin, which would reverse three con-
the state economy will gather
sible for the statewide and Houston
But most of the growth in metro-
secutive years of contraction. They
strength. although not as much as
economic recovery.
politan Dallas-Fort Worth, Texas
predict that manufacturing and re-
during the boom years.
Continued depreciation this
Perspectives forecast, will occur on
year, they predict, will help fuel
the Tarrant County side. It states
economic growth in Houston by 2.46
the economy in and around Fort
percent as local manufacturers and
Worth will strengthen this year by
petrochemical producers increase
1.87 percent, after declining
their output. The Houston economy
slightly last year and staying flat in
last. year grew 2.18 percent after
1987 and 1986.
recording three consecutive years
High-technology manufacturers
of negative growth between 1985
in Fort Worth will pick up any fal-
and 1987.
loff in defense-related industries,
That kind of scenario would be
where some analysts expect a slow-
consistent with what we're expect-
down in federal contracts, while
ing, said C.A. "Skip" Kasdorf, direc-
the aerospace industry continues to
tor of research for the Greater
grow, the magazine predicts.
Houston Partnership, the city's new
"The big variable is whether we
private economic development
get a recession," said Don Reynolds,
group. "For '89, we're looking for
president of 21st Century Forecast-
continued job growth, but that is
ing in Fort Worth, who expects 2
contingent on what happens with
percent or better growth for Fort
the national economy. If we do see a
Worth this year and next. "I don't
slowdown in the second half (na-
tionally), we will see a slowdown
here."
The Dallas-area economy, which
recorded negative growth in two of
the past three years, should expand
32,000 more Houston
Houston economy
The Houston area is expected to add 31,700 jobs next year, while
jobs forecast for 1989
the population will rise by 55,300.
Change in population
Change in employment
tion affiliated with Rice Univer-
In thousands
In thousands
By JOHN BARNETT
Houston Chronicle DEC 0 7 1988
sity made its predictions for 1989
60
60
based on an average oil price of
$18.79 a barrel, said Foss. But the
50
40
Houston will add almost 32,000
price softness in the second half of
40
new jobs during 1989, with most of
the year has brought that average
20
the growth coming in service, re-
down to $15.
30
tail and government sectors, Rice
"This reflects our belief that
20
0
Center economists announced
even if the current OPEC agree-
Tuesday.
ment holds through 1989, we still
10
Although the outlook for next
will not work off the surplus, and
-20
0
year is good, the picture is not as
prices will remain soft," she said.
bright as the one the economists
The fact the impact of the price
-10
-40
painted in July. They have lowered
drop was not greater reflects
their earlier projections by 3,000
Houston's reduced dependence on
-20
-60
jobs in the seven-county Houston
energy, Foss said.
-30
Metropolitan Statistical Area be-
While a national recession is not
cause of fluctuating oil prices.
-40
-80
in the cards next year, employ-
"The major factor influencing
'85
'87
'89
'91
'93
'85
'87
'89
'91
'93
ment growth in Houston will slow
our revised 1989 outlook for Hous-
between 1989 and 1990 because the
ton is softer energy prices," said
national expansion is slowing, Foss
'89 - '94 figures are estimated
Source: Rice Center
project manager Michelle Foss.
Earlier, the research organiza-
See JOBS on Page 5B.
Chronicle
Jobs
mists said. The improved utilization
projection. This forecast uses a 1989
rate for rigs should trigger a spurt in
oil price assumption of just under
employment of about 40,000 jobs
$10, which could happen once winter
Continued from Page 1B.
during both of those years.
fuel demand drops off and the ability
Manufacturing will continue to
of the Organization of Petroleum
said. As a result, the number of jobs
play an important part in the Hous-
Exporting Countries to maintain its
added in Houston in 1990 will drop to
ton economy, the study said.
pact is tested.
about 26,000, according to the Rice
Additional diversification could
Center study.
come if the region increases produc-
"In spite of revenue needs by
In the long run, however, the city's
tion of final consumer goods and
OPEC producers, we think there is a
growth rate will be greater. Between
non-energy-related capital equip-
possibility of another fall in prices to
1988 and 1992, Houston should gain
ment. As the region diversifies, there
levels unacceptable by OPEC, spur-
about 144,000 jobs and 210,000 resi-
also will be more demand for profes-
ring an accord that would be more
dents, Foss said.
sional services to meet the needs of
strongly enforced," Foss said.
Conditions will improve during
the new industries, Foss said.
Foss said that the harmful effects
1991 and 1992 as energy prices be-
The center also addressed the im-
of this scenario would be offset by
come more stable and the United
pact of lower oil prices and the
benefits to the area associated with
States works through its surplus
possibility of a national recession in
accelerated refining and petrochem-
stock of drilling rigs, the Rice econo-
1989 and 1990 in a "worst case"
icals activity.
Texas is ready to grow, agency predicts
AMERICAN @TATESMAN
FEB 02 1989
Associated Press
1-7
The latest edition of Fiscal Notes, pub-
said. "By the end of the year, recovery will
construction should hit bottom in mid-year.
lished by the comptroller's office, reported
turn into expansion as statewide employ-
The overall Texas economy will grow 2.4
The Texas economy is getting healthier
that since the recession's low point in spring
ment surpasses its late-1985 peak."
percent in 1989, Bullock said, about the same
and a measure of that recovery is that 90,000
1987, Texas has gained 176,000 jobs and re-
jobs should be created in 1989, Comptroller
covered 80 percent of jobs in 1986-87.
The major force driving the recovery will
as the nation's economy. Personal income
continue to be manufacturing, which bene-
for Texans will increase by more than 7
Bob Bullock's office said Wednesday.
Unemployment has fallen nearly 3 percen-
fits from the lower dollar and increasing
percent.
Such a jobs gain would set a record of 6.7
tage points, to about 7 percent by the end of
million Texans employed by year's end.
competitiveness of American exports, the
The state itself is also projected to grow.
1988.
"Texas has weathered the oil-bust years
comptroller's report said.
The report said Texas will gain almost
"Assuming the U.S. economy remains
200,000 in population and more people will
well," Bullock said. "We've regained most of
healthy and oil prices are relatively stable in
Most of the new jobs, however, will be in
move to Texas than move away. Population
the ground we lost, and the state's outlook
the current range, Texas' economic growth
trade and service industries. Oil and gas are
will increase 188,000, or 1.1 percent, during
continues to improve."
will continue through 1989," the newsletter
expected to remain stable; real estate and
the year, the report predicted.
RE
Tuesday. April 11, 1989
Houston Chronicle
3C
Banking, state officials planning meeting
By MARK TOONEY
mittee, and state Rep. Ashley Smith,
"The legislative process in Wash-
terrible problem and we have to do
Houston Chronicle Austin Bureeu
R-Houston, chairman of the House
ingtom is
in Its formative stages
something about it' But what are we
Financial Institutions committee, to
so I think you're going is go up there
going to do about it? I hope that any
meet with Federal Deposit Insur-
and find out there are several ap-
legislation at the state or federal
AUSTIN - Top legislative lead-
ance Corp. head L William Seidman
proaches to this problem on the
level doesn't do too much harm. Let's
era, including Lt. Gov. Bill Hobby,
and Robert Clarke, comptroller of
table, and it's really in a state of flux
not be in a barry to legislate OR this."
will travel to Washington later this
the U.S. currency.
right new," Clements said.
mouth to huddle with federal bank-
As exact date has not been set.
Hebby said be wants to meet with
Said Lewis about the financial
ing officials over Texas' troubled
This was one of many subjects we
federal officials about banking prob-
Institution problems, There seems
financial industry.
(Bush and Clements) discussed.
lerns because "It's a subject I'm net
to be no answer and we're looking for
Gev. Bill Clements, House Speaker
We're all searching for solutions on
very well informed on."
an answer.'
Glb Lewis and Mobby met for an
this S&L situation. It does net lend
Some state legislators have com-
hour on Monday to discuss the state's
itself to a quick fix. It just does not,"
plained that Texas financial institu-
There's a concern that we have
banking and savings and loan crisis.
Clements said after emerging from
tions taken over by the federal gov-
over what role the state is playing in
The governer, fresh from his own
the meeting with Hobby and Lewis.
ernment recently "are not compet-
addressing the needs of financial
trip to Washington where be met last
Asked if Bush suggested any legis-
ing fairly" with independently
Institutions," bewis said. "Bs the
week with President Bash, has ar-
lative action on the part of Texas
owned banks, said Hobby.
state doing overything It can to
ranged for Hobby, Sex. OIL "like"
officials, Clements replied, "I'm tell-
Tm pretty skeptical of legislation
regulate this type stuff? This meet-
Harris, R-Dallos, chairman of the
ing you we're not at that point.
in this area. We all sort of have a
ing will help us understand what role
Senate Economic Development com-
Everybody is seeking solutions.
vague feeling of, Gee this is a
we should play."
MCorp to P.IA seek bankruptcy protection
Case raises questions on role
MCorp FINANCES
Net Income
Assets
of federal regulators, courts
Figures in millions of dollars
30000
Figures in millions of dollars
200
By Gary Jacobson
28 1989
102.5
100.4
107.7
132.4
20697
22586
21887
Editorial.
12A
20228
o
8820**
Staff Writer of The Dallas Morning News
20000
The planned Chapter 11 bank-
Reaction calm.
1D
ruptcy filing by MCorp could be a
MCorp, which can file for protec-
-200
-82.1
landmark case in establishing the
tion.
-258.3
10191
11884
relationship between banking regu-
A major question is whether fed-
-400
lators and the bankruptcy courts,
10000
eral regulators can now seize any or
legal experts said Monday.
all of the individual banks without
Unlike the bankruptcy filing by
-600
approval from bankruptcy court.
First RepublicBank Corp. last July
-760**
Regulators and some legal experts
- one day after regulators seized
say a bankruptcy filing does not af-
-800
0
its Texas banks - MCorp still con-
fect the government's freedom in
'82 83 '84* '85 '86 '87 '88
'82 '83 '84" '85 '86 '87 '88
trols all 25 of its subsidiary banks.
this area. Others, however, are not
Regulations prohibit the banks
Mercantile Texas Corp. and Southwest Bancshares Inc. Merged in 1984
sure.
:
themselves from filing for bank-
Estimate
"This has the potential to be a
ruptcy, yet they are considered as-
SOURCE: MCorp, Federal Deposit insurance Corp.
sets of the holding company,
Please see CASE on Page 6A.
The Dallas Morning News
Case raises questions for regulators, courts
Continued from Page 1A.
Over the weekend, MCorp said it
sets to its subsidiary banks.
Martin Klein, a New York lawyer
fascinating case," said Jay West-
planned to file for protection from
But once the Chapter 7 proceed-
specializing in bankruptcy, said he
brook, a law professor at the Uni-
creditors under Chapter 11 of the
ing was filed, legal experts say,
expects the FDIC to continue work-
versity of Texas at Austin who spe-
U.S. bankruptcy code. The move was
MCorp had few other choices.
ing closely with MCorp. He does not
cializes in bankruptcy. "The pre-
in response to a small group of the
It could accept the liquidation,
anticipate that regulators will move
cedents it sets could be as much
company's bondholders who filed
fight it or exercise its legal right to
quickly to take over the subsidiary
practical as they are legal."
their own Chapter 7 petition last
convert to Chapter 11.
banks.
week in New York.
Liquidation was an unacceptable
Mr. Klein said the attorney - I.
At issue, the experts say, are gov-
Chapter 7 calls for the involun-
choice. To fight the Chapter 7 fil-
Walton Bader - for the bondhold-
ernment policies that do not always
tary liquidation of a company, with
ing, MCorp would have to prove
ers who filed the Chapter 7 petition
agree. Banking regulators, for in-
proceeds divided among the credi-
that the allegations - namely, it
is well-known in New York bank-
stance, are mainly concerned about
preserving and stabilizing the
tors. Chapter 11, a voluntary action
has not paid interest on certain
ruptcy courts.
banking system. Bankruptcy laws
that supersedes Chapter 7, allows a
debt on time - are untrue. The
"This is a game he's playing," Mr.
are concerned with getting the
company to continue operating
company, however, has said it
Klein said of Mr. Bader. "He's trying
most money possible for a com-
while it attempts to reorganize.
stopped paying interest on some
to get control. Chapter 11 puts the
Last November, MCorp and the
debt.
company back in control."
pany's creditors.
Federal Deposit Insurance Corp.
"The most viable alternative for
Mr. Bader did not respond Mon-
Particular policies do not always
negotiated a standstill agreement
us is to convert to Chapter 11," said
day to messages left on an answer-
prevail. In the case of Continental
Airlines, legal experts said, bank-
that avoided bankruptcy. MCorp
MCorp spokesman George McCane.
ing machine at his firm.
ruptcy laws took precedence over
said it would not seek Chapter 11
MCorp has 20 days to make the con-
While the Chapter 7 petition was
labor law. The airline was able to
protection, and the regulators
version, a relatively simple process.
filed in New York, many legal ex-
agreed to back off from demands
"We will convert," Mr. McCane said.
perts said they expected the case to
cancel its labor contracts.
But in cases involving environ-
that the holding company supply
"The timing has not been deter-
ultimately wind up in Dallas, where
mental laws, the U.S. Supreme Court
some of its $250 million in liquid as-
mined yet."
MCorp is based.
has ruled that companies in bank-
ruptcy proceedings cannot walk
away from costs associated with
their environmental obligations.
"This case raises some new possi-
bilities," said Toby Gerber, a part-
ner at Johnson & Swanson in Dal-
las. "A lot of bankruptcy practition-
ers will be looking closely."
Thrifts
From C9
Clements said.
ance fund.
have expressed concern that a
know. What's happening? What's
For example, one aspect of the
quick sale of bad assets would
Bush plan proposes putting the
Seidman's agency is also expect-
going to be the next step?"
further weaken the state's already
savings and loan industry's deposit
ed to play an important role in dis-
fragile real estate industry.
Clements said it is too early to
insurance fund under FDIC con-
posing of bad assets from insolvent
Lewis said the lawmakers will try
tell whether the Legislature should
trol. The FDIC has historically
thrifts. Many Texans, including
to find out "If there is something
take any action to address the
controlled the bank deposit insur-
U.S. Rep. Jake Pickle, D-Austin,
we should know that we don't
problem.
Texas to pcq send thrift plan contingent
APR 1 1 1989
vent thrifts around the country, in-
of the Senate Economic Develop-
By Debbie Graves
cuding 63 in Texas, until Congress
ment Committee; and Rep. Ashley
American-Statesman Capitol Staff
appropriates the funds to sell,
Smith, chairman of House Finan-
A group of Texas lawmakers will
merge or close the institutions.
cial Institutions Committee. Clem-
go to Washington later this month
The lawmakers will also meet
ents said other representatives and
in search of a solution to the state's
with Robert Clarke, the U.S.
senators may be added to the
savings and loan crisis.
Comptroller of the Currency,
group, which will travel to Wash-
Gov. Bill Clements has arranged
whose agency regulates nationally
ington within 10 days. No definite
chartered banks.
date has been set yet.
for the Texas contingent to meet
with L. William Seidman, chair-
Clements, Lt. Gov. Bill Hobby
Clements said he discussed the
man of the Federal Deposit Insur-
and House Speaker Gib Lewis an-
thrift industry debacle last week
ance Corp., whose agency has been
nounced the trip after they met in
with President George Bush over a
given a lead role in the Bush plan to
an hour-long private meeting Mon-
long lunch.
rescue the problem-plagued thrift
day, which was also attended by a
industry.
handful of key legislators.
"We are all searching for solu-
Seidman's agency, normally a
Likely to travel to Washington
tions on this S&L situation and it
bank regulator, has been given the
on the fact finding mission are:
does not limit itself to a quick fix,"
task of controlling nearly 230 insol-
Hobby; Sen. Ike Harris, chairman
See Thrifts, C11
Deposit run blamed
for MBank PIA seizures
MAR 30 1989
By David LaGesse
MCORP BANKS SEIZED
Staff Writer of The Dallas Morning News
A run on deposits at the lead
James Gardner profile.
1D
bank of MCorp in Dallas — involv-
Bankruptcy status.
1D
ing banks within and outside the
holding company — led to a liqui-
Reaction to FDIC action.
4D
dity crisis that forced the govern-
Gene Bishop profile.
4D
ment to seize 20 of the firm's subsidi-
aries, regulatory and industry
Bidding now begins anew for the
sources said Wednesday.
former banks of MCorp, which for
More than 200 federal regulators
nearly a year has sought a govern-
fanned out across Texas on Tuesday
ment-assisted bailout. The FDIC
to check the pulse of the 25 banks
faces one of its most costly banking
owned by MCorp. By 1 a.m. Wednes-
rescues ever, with some analysts es-
day, the government had seized the
timating that the insurance fund
bulk of the company's operations.
will commit $2 billion to the bailout.
The Federal Deposit Insurance
Five solvent banks with $2.8 bil-
Corp. now operates the 20 former
lion in deposits and $3.2 billion in
MBanks as the Deposit Insurance
assets remain under the ownership
Bridge Bank, a newly chartered,
of MCorp. But observers wonder
wholly government-owned institu-
whether they can withstand the
tion with $15.4 billion in assets. The
pending bankruptcy filing of the
L. William Seidman
mon-
FDIC took control of the banks after
parent company.
Accounts at all 25 of the current
itored the MCorp situation
the U.S. comptroller of the currency
declared them insolvent.
Please see RUN on Page 8A.
throughout the day Tuesdav.
47
Run on deposits blamed
for seizure of MBanks
Continued from Page 1A.
ington consulting firm.
at First Republic," said one banker,
and former MCorp banks remain
"It principally was the solvent
asking to not be named. "I just
(covered up to the normal $100,000
banks within the MCorp system that
couldn't take the risk they wouldn't
limit on federal deposit insurance.
were refusing to continue to keep
distinguish between my deposits
The banks opened Wednesday morn-
lines of credit outstanding to the in-
and the accounts of other MBanks."
ing for normal operations.
solvent banks," he said.
Actually, the FDIC said it trans-
The fast-moving series of events
Profitable and healthy MBanks
ferred all other depositor accounts
that brought down MCorp, the last
in El Paso, Corpus Christi and
at 19 of the seized MBanks in full to
of the Dallas-based holding compa-
Brownsville and unaffiliated insti-
the new bridge bank.
nies to collapse, began last week
tutions elsewhere knew from expe-
The once exception came at
with the filing of an involuntary
rience with the FDIC that the
MBank Abilene. The government
bankruptcy petition against the par-
agency would use interbank trans-
chose to essentially liquidate that
ent firm.
actions to seize their institutions,
bank, transferring only deposits up
MCorp officials responded Mon-
said Frank W. Anderson, a bank ana-
to the $100,000 limit to the bridge
day morning by saying the company
lyst with Stephens Inc., an invest-
bank.
would seek protection in the courts
ment firm in Little Rock, Ark.
That move came because of un-
under Chapter 11 of the U.S. bank-
When First RepublicBank Corp.
usual liabilities at the Abilene bank,
ruptcy code.
failed in the summer of 1988, regula-
a failing institution that MCorp ac-
That caused a panic among bank-
tors first declared the company's
quired in the early 1980s. Juries
ers, particularly those with accounts
largest banks insolvent. That caused
have delivered major judgments
at the troubled MBank Dallas, the
a number of the company's 38 other
against the old Abilene National
flagship bank of MCorp and one of
Texas banks to fail because those in-
Bank in recent years, including two
its most troubled institutions, said
stitutions had lent the money to the
lender-liability suits that brought
Robert Clarke, the U.S. comptroller
company's biggest institutions in
$68 million and $40 million judg-
of the currency.
Dallas and Houston.
ments.
"The primary funding difficulty
Regulators used the same domino
initially was with the lead bank in
effect in seizing 14 of the 20 MBanks
While the $40 million suit was re-
Dallas," he said. "That's where the
that were seized Tuesday.
cently overturned on appeal, and
principal downstream deposit ac-
Early in the process, on Tuesday
the other was recently heard by an
counts were within the system."
evening, the comptroller declared
appeals court, the FDIC essentially
Unaffiliated depositors also ini-
MBank Dallas insolvent - and es-
extinguished those judgments by
tially focused on the Dallas bank
sentially refused to honor the depos-
liquidating the bank, Mr. Isaac said.
Monday, Mr. Clarke said Wednesday
its of other MBanks beyond the
An FDIC spokesman said few ac-
morning, speaking at a news confer-
$100,000 limit on federal insurance.
counts with uninsured deposits re-
ence in Washington with FDIC
That brought down the 14
mained at the Abilene bank. By mid-
Chairman L. William Seidman.
MBanks, with six already seized un-
morning Wednesday, examiners had
The three-member FDIC board of
der the more normal criteria of capi-
found only $1,000 in uninsured. de-
directors, which includes Mr.
tal insolvency. After losses of more
posits, apparently because rumors
Clarke and Mr. Seidman, monitored
than $900 million last year in the
had long suggested the impending
the Texas situation throughout the
system of MBanks, and a recent ex-
failure to depositors.
day Tuesday.
haustive federal exam, the six banks
Until Tuesday afternoon, MCorp
"But it became clear as the day
had used up the cash cushion that
officials still hoped the company
wore on that the bank was not going
the government requires for banks
might survive its funding crisis, cor-
to meet the demands of its deposi-
to operate.
porate officials said. Deposit with-
tors," Mr. Clarke said.
Other bankers had also feared
drawals were accelerating, but still
MCorp
was
essentially
the fate of their deposits at MBank
appeared manageable as long as the
dismembering itself from within, as
Dallas. Officers of several Texas in-
govenment continued advancing
some of the biggest demands for
stitutions said they had withdrawn
MBank Dallas the approximately
withdrawals came from the other
their check-clearing business from
$1.5 billion it had been loaning
MCorp banks, industry sources said.
MCorp on Monday and Tuesday,
since late October.
The MBanks realized that the
fearing their exposure if the govern-
bankruptcy threat would likely
But late Tuesday, the govern-
ment refused to make their accounts
force regulatory action against the
ment told selected MCorp officials to
whole.
company, said William Isaac, presi-
plan to work late. That evening
"The FDIC brought part of this
dent of the Secura Group, a Wash-
about 7 p.m., a group of about 15 fed-
on itself by the way it treated banks
eral regulators had gathered at the
M
MCorp
WHAT THE FDIC SEIZED
The Deposit Insurance Bridge Bank, a chartered institution wholly
owned by the Federal Deposit Insurance Corp., assumed control of 20
failed MBanks Wednesday. All of the institutions opened for business as
usual. The following is a list of total assets and deposits of the institu-
tions, in thousands, as of Feb. 28, 1989:
Assets
Deposits
MBank Abilene
$188,846
$205,671
MBank Alamo
$717,213
$673,443
MBank Austin
$622,722
$551,909
MBank Brenham
$144,857
$135,073
MBank Corsicana
$192,351
$188,365
MBank Dallas
$6,421,568
$3,667,072
MBank Denton Co. (Lewisville)
$225,173
$218,176
MBank Fort Worth
$750,125
$662,921
MBank Greenville
$163,434
$162,474
MBank Houston
$3,170,976
$2,438,015
MBank Jefferson Co. (Port Arthur)
$334,167
$311,281
MBank Longview
$271,218
$261,498
MBank Marshall
$232,523
$222,120
MBank Midcities (Arlington)
$369,698
$347,826
MBank Odessa
$369,439
$351,687
MBank Orange
$157,467
$150,631
MBank Round Rock
$166,612
$166,864
MBank Sherman
$282,227
$270,207
MBank Wichita Falls
$447,180
$437,206
MBank The Woodlands
$160,933
$156,127
SOURCE: Office of the Comptroller of the Currency, Federal Deposit Insurance Corp.
MCorp's REMAINING BANKS
Figures in thousands as of Dec. 31, 1988
Equity
Assets
Deposits
capital
MBank
El Paso
$1,314,483
$1,176,077
$63,140
MBank
Corpus Christi
$799,193
$670,338
$25,536
MBank
Waco
$476,631
$450,402
$10,047
MBank
Brownsville
$452,587
$420,689
$22,325
MBank
New Braunfels
$136,309
$129,376
$5,490
SOURCE: Federal Deposit Insurance Corp.
The Dallas Morning News
downtown Dallas headquarters of
The end was apparent, but
MBank Dallas - the modern and al-
dragged throughout the evening. It
most brand-new Momentum Place.
was not until 1 a.m. that the last
About that time MCorp officials
bank was closed, in Sherman, a near
received word that regulators had
the Oklahoma border, directly north
of Dallas.
closed the first of the company's
banks - MBank Round Rock, in a
Staff writer William Choyke in
suburban community north of Aus-
Washington contributed to this re-
tin.
port.
49
C2
Austin American-Statesman
Wednesday, March 29, 1989
S&L real estate won't be dumped, Brady reassures Texans
DALLAS (AP) - Treasury Sec-
that people in Texas are concerned
billion, are in Texas.
S&L bill moving through Congress.
ties or the "securitization" of pools
dustry and taxpayers splitting the
retary Nicholas Brady assured
that federal officials will 'dump'
Texas business leaders Tuesday
real estate held by insolvent S&Ls
"We understand the potential
As an alternative, the Treasury
of real estate for sale to public in-
interest payments, Brady said.
destructive effects on the local
Department is working on an oper-
vestors, the official said.
"Some have suggested that the
that federal regulators would not
on the local market," Brady said
economies of wholesale dumping,"
ating plan for the Resolution Trust
Brady also used the speech to
resolution of the crisis would be ex-
disrupt the state's fragile recovery
Tuesday in a speech to the Greater
by dumping real estate gained
Dallas Chamber of Commerce.
Brady said. "Let me assure you
Corp., the government entity in the
campaign for the Bush plan, which
pedited by a one-time, lump-sum
that we intend to proceed very
Bush proposal that would liquidate
would bring thrift regulation under
appropriation of the necessary
through the closing of insolvent
Local business leaders have fre-
carefully with real estate sales."
failed S&Ls, according to an ad-
the Treasury Department.
funds by the government. I strong-
savings and loans.
quently expressed the fear that the
ministration official, who spoke on
The plan would cost $40 billion
ly disagree," Brady said.
In his first trip this year to the
Federal Asset Disposition Associa-
Brady said the government also
state hardest hit by the thrift crisis,
tion, or a proposed vehicle - the
would be robbing itself by cut-rate
condition of anonymity.
to finance the insolvent institu-
Such an allocation would make it
sales, because the money generated
The trust will be free to consider
tions already taken care of and set
impossible to meet deficit reduc-
Brady also pushed the Bush ad-
Resolution Trust Corp. - would
unload the real estate at below-
can be used to help pay for the res-
a number of innovative proposals
aside another $50 billion to be
tion goals established by Gramm-
ministration's $90 billion rescue
plan as "the best realistic ap-
cue plan.
for preventing dumping, including
spent during the next three years,
Rudman, which calls for across-
market prices to clear it off their
proach" and warned that the crisis
the creation of regional trusts to
Brady said. The principle would be
the-board budget cuts if the deficit
books.
Despite Brady's assurances, and
buy and manage problem proper-
paid by the industry, with the in-
exceeds certain levels.
is costing taxpayers $20 million per
The FADA currently manages
other statements by FADA offi-
day and debate over alternative fi-
about 2,200 assets in 33 states, with
cials, the administration is resist-
nancing could increase the cost by
an approximate value of about $3.8
ing efforts by Sen. Timothy Wirth,
as much as $500 million.
billion. More than 1,500 of those
D-Colo., and other legislators to
"We in Washington are aware
assets, worth an estimated $2.59
write dumping obstacles into the
HOUSTON CHRONICLE
MAR 29 1989
DZB
Brady: Feds won't
dump real estate
By GREG STEINMETZ
Houston Chronicle
Treasury Secretary Nicholas
Brady said Tuesday that federal
regulators would not sidetrack the
state's economic recovery by selling
property obtained from insolvent
savings and loans at below-market
prices.
Texas business leaders fear the
government will hold a fire sale of
the real estate it acquires from
failed thrifts. Such a move, they say,
would drive down depressed real
estate values even further.
"We understand the potential de-
structive effects on the local econo-
mies of wholesale dumping," Brady
said in a speech to the Greater
Dallas Chamber of Commerce. "Let
me assure you that we intend to
proceed very carefully with real
Nicholas Brady
estate sales.
"Decisions will be evaluated and
Sen. Don Riegle, D-Mich., and oth-
made with the best interest of every-
ers have said their proposal would
one involved, particularly local com-
save money in the long run. They say
munities, taken into consideration,"
the off-budget financing scheme pro-
he said.
posed by Bush raises by billions of
The administration objects to ef-
dollars the government's borrowing
forts by Sen. Timothy Wirth, D-Colo.,
costs.
and others to write anti-dumping
Brady conceded off-budget financ-
provisions into savings and loan res-
ing costs more than if the Treasury
cue bills being considered by Con-
borrowed the money, but said the
gress.
costs would soar even higher if the
"Obviously there's some real es-
Gramm-Rudman constraints were
tate that's junk
that has no value
abandoned.
now, that never did have, never will
"The idea would make a mockery
have. You might as well get that
of the Gramm-Rudman targets," he
behind you," Brady said. "There's
said. "That would raise interest rates
other real estate that's well-con-
in my opinion. Gramm-Rudman, like
ceived which has tenants in buildings
it or not, is still the only process the
and people living in condos
and
rest of the markets count on."
those kinds of properties shouldn't be
On Monday, Sen. Phil Gramm, the
thrown on the market willy-nilly and
Texas Republican who sponsored the
won't be."
budget-balancing law, called on
Speaking later in the day in Hous-
Brady to take a tougher stand
ton, Brady blasted a proposal to pay
against the Democratic proposal:
for the savings and loan rescue with
Separately, Brady said liquida-
a lump sum.
tions are a possibility for large insol-
Brady, in remarks made after an
vent savings and loans. When asked
address to the Greater Houston
whether any savings and loan was
Partnership, said he opposes efforts
too big to liquidate, he replied: "I
to have the Treasury pay the entire
doubt it, but you have to take those
cleanup bill immediately instead of
cases one by one."
spreading payments out over 30
He said the decision to liquidate
years as called for under the admin-
assets and pay off the depositors
istration proposal.
depends on the quality of the thrift's
The Bush proposal would not im-
asset portfolio. Thrifts with poor
pact the federal deficit, while the
asset quality have a greater chance
Democrat-backed plan would raise
of being liquidated, he said.
the deficit by about $50 billion, in
Brady said the Bush proposal
violation of the Gramm-Rudman
would do a lot to crack down on bank
budget balancing law, he said.
fraud. In addition to giving the Jus-
"This is a very bad idea," Brady
tice Department $50 million to inves-
said. "In fact, it's a terrible idea,
tigate bank fraud, the bill includes
almost bordering on irresponsible."
harsher penalties for wrongdoers.
DALLAS MORNING NEWS
6961 29 RAR
Brady says S&Ls won't be closed en masse
Brady: S&Ls won't
Continued from Page 1D.
the audience, Mr. Brady said re-
means of waging the battle.
cash, we will get actual motion in
Federal Home Loan Banks, insti-
gulators have no intention of
"There are as many indica-
the resolution process, and we
tutions owned by the thrift indus-
be closed en masse
dumping real estate acquired
will be better off."
tions that inflation is holding
from broke S&Ls.
try and used to help the S&Ls
Texas has been the center of
level as it is going up," Mr. Brady
meet their liquidity require-
"Some real estate is junk," Mr.
said.
the thrift crisis. Of 217 thrift reso-
ments, could also remain inde-
Brady said. "There is other real
Meanwhile, Mr. Bartlett held
lutions during 1988, 88 were in
pendent.
By Michael Weiss
estate that is well conceived
that will drive our deficit down."
out hope that savings and loans'
Texas. According to figures from
Under the Bush plan, the bank
And these properties shouldn't
Staff Writer of The Dallas Morning News
minimum capital requirements -
Raising the money to finance
the Federal Home Loan Bank
board system is to be placed un-
be thrown on the market willy-
Savings and loans across Texas
the $110 billion Bush plan will get
Board, the industry's primary re-
scheduled in the Bush plan to be
der the jurisdiction of the Treas-
nilly, and they won't be."
will not be closed en masse and re-
the S&L industry back on its feet
virtually doubled by 1991 to
gulator, 69 insolvent thrifts hold-
ury Department along with regu-
While rising short-term inter-
gulators will stand ready to work
and allow regulators to shut down
match the 6 percent level cur-
ing $26.5 billion in assets con-
latory oversight of the thrift in-
est rates widen the losses in-
rently in effect for banks - could
with some marginal institutions if
hemorrhaging, broke thrifts, he
tinue in business in the South-
dustry.
they appear salvageable, Treasury
said.
curred by insolvent thrifts, Mr.
be stretched to 1993.
west. Another 54, with an asset
The thrift industry, led by the
Brady said he concurs with Fed-
Secretary Nicholas Brady told the
"In no way should an insolvent
"I am not so sure 1991 require-
base of $17.7 billion, are regarded
U.S. League of Savings Institu-
eral Reserve Chairman Alan
Greater Dallas Chamber of Com-
thrift that is not coming back be
ments can be met by a significant
tions, has said it fears loss of the
as troubled and likely to require
kept open," Rep. Steve Bartlett, R-
Greenspan that fighting inflation
number of institutions in the
merce on Tuesday.
new capital.
independent home loan bank sys-
Mr. Brady also argued that
Dallas, told reporters following
is important - although the two
Southwest," Mr. Bartlett said.
Responding to questions from
tem and its credit network under
funding for Resolution Trust Co.,
Mr. Brady's remarks to chamber
officials may not agree on the
He also suggested that the 12
the Bush plan.
which is to sell $50 billion in bonds
members. Mr. Bartlett is a member
to finance the Bush thrift bailout
of the House Banking Committee,
plan, be kept off budget where it
which he predicted should com-
cannot throw the government out
plete its work by the end of May
of compliance with Gramm-Rud-
and have legislation' to the presi-
man spending constraints.
dent that is little changed from the
"It is important that we do not
original Bush plan.
make a mockery of Gramm-Rud-
"The main point is to get some
man," Mr. Brady said. "It is not
money in the process," Mr. Brady
only the law of the land; it is the
told the chamber. "Once we get
wheelhorse of the fiscal discipline
Please see BRADY on Page 2D.
FORT WORTH STAR TELEGRAM
MAR
'OFF-BUDGET' BORROWING
2.g
1989
HASLAWMAKERS WORRIED
Treasury standing firm
on thrift crisis remedies
BY STEVE ZUCKERMAN
Fon Worth Star-Telegram
in hundreds of marginally solvent thrifts going out of
business during the next several years.
Treasury Secretary Nicholas Brady said yesterday
that the administration does not intend to back down
Brady made his remarks in Dallas at a breakfast
from two controversial aspects of President Bush's
meeting sponsored by the Dallas Chamber of Com-
thrift rescue plan.
merce. The meeting was followed by a question-and-
answer session with reporters.
Brady said the Treasury Department remains in
favor of borrowing $50 billion or more to resolve the
He was joined by Rep. Steve Bartlett, R-Dallas, a
thrift crisis largely "off-budget" so as not to affect the
member of the House Banking Committee. Bartlett
federal deficit
said he expects Congress to modify the administra-
Several lawmakers and industry experts, who re-
tion's proposal and to have a bill ready for the presi-
cently have speculated on a softening of the adminis-
dent's consideration in May.
tration's position, think that will result in adding
On Feb. 6, Bush proposed a $90 billion rescue of the
billions of dollars to the ultimate cost, and in taxpay-
savings and loan industry, with $50 billion of that
ers having to foot more of the bill.
coming from the sale of long-term bonds and thus not
Brady also said the administration will continue to
part of the federal budget process. The principal on
push for its plan to double capital requirements at
those bonds is to be repaid through increased bank
savings and loans by 1991. Experts, including many
and thrift insurance premiums. The interest on the
Texas thrift executives, say the proposal could result
bonds and the remaining $40 billion of the rescue plan
(More on BRADY on Page 3)
Brady
From Page 1
is to come from taxpayer money.
"Also. the capital standard is not a
"Some have suggested that the reso-
make-it-or-be-liquidated standard. If a
lution of the (thrift) crisis would be
thrift has a realistic business plan and
expedited by a one-time. lump sum
shows real progress toward reaching the
appropriation of the necessary funds by
standard. federal regulators have the
the government." said Brady.
authority to extend the time period for
"I strongly disagree. The taxpayers
reaching the standard."
did not create this problem - there is
Bartlett opposes doubling the capital
no reason why they should have to
standards by 1991. favoring instead a
shoulder the full burden of solving it.
1993 deadline. He said he expects a
"There is another reason not to try to
compromise to be reached by lawmak-
force the taxpayer to absorb the full
ers.
brunt of the financing - the intent and
Bartlett also said Congress will call
integrity of Gramm-Rudman-Holl-
for other changes in the president's
ings" (budget-balancing law).
"If we open up the issue of exemp-
plan. He said lawmakers probably will
recommend that bank holding compa-
tions to Gramm-Rudman. the one sure
nies immediately be permitted to ac-
consequence will be delay in the pas-
sage of this legislation. We cannot af-
quire savings institutions. The admin-
istration's plan calls for a two-year
ford delay. If the debate or alternate
moratorium before banks can buy
financial plans takes even three weeks.
thrifts.
the cost to the taxpay er goes up by $500
million."
Both Bartlett and Brady said regula-
Brady then explained why he sup-
tors do not intend to sell the billions of
ports increasing capital requirements
dollars' worth of real estate owned by
for thrifts to 6 percent from 3 percent in
the ings institutions at below-mar-
two years.
ket prices.
"Our plan requires that thrifts oper-
"We in Washington are aware that
ate under the same accounting stand-
people in Texas are concerned that fed-
ards as commercial banks." he said.
eral officials will dump real estate held
"Some have suggested that the higher
by insolv ent S&Ls on the local market."
capital requirements will force out of
Brady said. "We understand the poten-
business otherwise healthy S&Ls. This
tial destructive effects on the local
is highly unlikely. The industry is in
economies of wholesale dumping. Let
better capital shape than many believe.
me assure you that we intend to pro-
First. 50 percent of all solvent S&Ls
ceed very carefully with real estate
today meet the 6-percent standard.
sales."
21 more Texas S&Ls taken over
UALLAS TIMES HERALD
MAR 10 1989
U.S. total
reaches 118
By Ross Ramsey
OF THE TIMES HERALD STAFF
onservatorship
Government regulators took over 45
Texas S&Ls taken over by federal regulators OR Thursday
savings and loan institutions Thurs-
institution
Assets!
Deposits'
day, including 21 in Texas, crossing
and Loan Association, Galveston;
the halfway point in their efforts to
nin Franklin, Houston
$2,54
$2,005
stop the bleeding in the nation's 200
Come onwealth Savings, Houston
1,661
1,608
TAKEOVER
Village Savings, Houston; Uni-
versal Savings Association, Hous-
most insolvent thrifts.
Banc Plus Savings, Pasadena
971
922
ton; Ameriway Savings, Houston;
The Texas thrifts, all in the Houston
From C-1
Spring Branch Savings and Loan
area, have $7.3 billion in assets and
Contintental Savings, Bellaire
355
587
Association, Houston; First Capi-
$7.4 billion in deposits. Only two of
As S&L of Brozoria, Lake Jackson
283
327
In addition to the three Texas
tal Savings Association of Texas,
the Texas thrifts taken over - Conti-
thrifts mentioned previously,
Houston; Humble Savings and
nental Savings of Bellaire and Benja-
in millions as of Dec 31
other S&Ls in the state put into
Loan Association, Humble; Bay-
min Franklin Savings of Houston -
SOURCE: Federal Deposit Insurance Corp.
conservatorships include:
shore Savings Association, La
have branches in the Dallas-Fort
Western Gulf Savings. and
Porte; American Savings and
Worth area.
Dallas Times Herald
wealth Savings Association of Hous-
Loan Association, Bay City; Citi-
Loan Association of Brazoria,
Regulators also took control of
The FDIC is taking control of the
zens of Texas Savings and Loan
Lake Jackson; City Savings Asso-
thrifts in Alabama, Colorado, Georgia,
thrifts on an interim basis, to control
ton, $1.7 billion.
Association, Baytown; Century
ciation, League City; Liberty
Michigan, New Mexico, Pennsylvania
losses while Congress considers
Commonwealth Mortgage Corpora-
Savings and Loan Association,
County Federal Savings and
and Tennessee.
Bush's proposal.
tion of America, a subsidiary of Com-
Baytown; Trinity Valley Savings
Loan Association, Liberty; Banc-
The thrifts were placed in conserva-
Together, the 45 thrifts have assets
monwealth Savings, has two branches
and Loan Association, Cleveland;
Plus Savings Association, Pasa-
torship as part of the Bush administra-
of $13.6 billion and deposits totaling
in the Dallas area and is one of the
Southeastern Savings Associa-
dena; and First Equity Savings
tion's plan to solve the S&L crisis. In-
$13.0 billion, officials said. Three of
largest mortgage banking firms in the
tion, Dayton; Bankers Savings
Association, Tomball.
cluding Thursday's action, the Federal
the S&Ls have more than $1 billion in
United States, servicing about $12 bil-
Deposit Insurance Corp. has been
assets: Hill Financial Savings of Red
lion in mortgage loans.
named managing agent for 118 sav-
Hill, Pa., $3.0 billion; Benjamin
ings and loans in 24 states.
Franklin, $2.6 billion; and Common-
Please see TAKEOVER, C-7
S&L withdrawals hit record $10.7 billion in January
Continued from Page 1D.
payers instead would contribute a
ficates at thrifts increased an aver-
combined $110 billion over 10 years
ularly in Texas.
focused on the government's delib-
age of 16 basis points, compared to a
erations of a thrift bailout plan.
toward the bailout.
On Tuesday, officials at South-
hike of 41 basis points among
News reports circulated late in the
In addition, Mr. Barth pointed to
west Savings Association of Dallas
money market funds. A basis point
month that President Bush might
the higher rates offered by money
acknowledged an audit of the four
equals one one-hundredth of a per-
levy a special fee on insured depos-
market funds, which also caused de-
institutions acquired in 1988 by that
centage point.
its to finance the rescue of the na-
positors to switch large amounts of
thrift would' show a deeper hole
tion's thrifts.
deposits from banks and savings
Meanwhile, at many institutions
that must be filled by the Federal
The Bush administration in
and loans in the late 1970s and early
sold by the bank board last year, re-
Savings and Loan Insurance Corp.
early February announced a plan
1980s.
gulators have attempted to shrink
At the time of the May transac-
that did not include the deposit
During January, for example,
asset bases, Mr. Barth said. Thirty
tion, the agency estimated it would
levy. The thrift industry and tax-
rates on three-month deposit certi-
percent of the outflow came from
need to commit $483 million to bal-
the five Southwest states, home of
ance the assets and liabilities of the
nearly half of the more than 200
institutions acquired by Southwest
thrifts sold or closed by the bank
Savings in the assisted transaction.
board last year.
On Tuesday, Southwest Savings
Meanwhile, the bank board's es-
executive vice president Richard
timate of the cost for those transac-
Park said that amount would in-
tions came under attack from gov-
crease but said he did not know by
how much.
Withdrawals at
S&Ls hit record
The figures indicated an accel-
eration of deposit outflows from
the nation's savings and loans
that began late last year. The
bank board previously reported
deposit outflows of $8.1 billion in
December, which it revised Tues-
day to $8.3 billion, and $7.1 billion
in November.
The record withdrawals in
January more than doubled the
estimate earlier this month by
bank board chairman M. Danny
Wall. Mr. Wall at the time told a
congressional committee that he
thought deposit outflows from
thrifts had reached $5 billion for
the first month of the year, and a
Four of five savings and loans
experienced deposit declines in
January, when speculation
ernment auditors. Over the week-
end, a top official of the U.S.
An FSLIC spokesman said an out-
General Accounting Office said the
like number in February.
Please see S&L on Page 4D.
side auditing firm had completed
bank board had underestimated the
its review of the Southwest Savings
negative net worth of institutions
portfolio, but the agency is not
involved in the transactions, partic-
ready to release the new figure.
PID
MAR 15 1989
By David LaGesse
Staff Writer of The Dellas Morning News
Depositors withdrew a record
$10.7 billion from the nation's sav-
ings and loans in January - the
month that news reports said the
federal government might levy a
fee on bank and thrift accounts.
Thrift regulators also attribu-
ted the withdrawals to consumers
seeking higher interest rates of-
fered by money market funds,
and to a planned program of
shrinking the size of some institu-
"Rates offered by thrifts and
commercial banks have been in-
creasing far less rapidly than
those on competing investments,"
James Barth, chief economist of
the Federal Home Loan Bank
Board in Washington, said in a
tions.
statement.
U.S. urged
to rethink
S&L deals
PIA
Viability of Texas thrifts
concerns GAO officials
By Robert Dodge
MAR 15 1989
Washington Bureau of The Dellas Morning News
WASHINGTON - The General Accounting Of-
fice said Tuesday that it is concerned about the via-
bility of the Texas savings and loan industry and
recommended that regulators find a way out of fi-
nancial commitments to thrifts merged under the
now-defunct Southwest Plan.
Senior officials of the GAO, the watchdog audi-
tors of Congress, said the flurry of savings and loan
Record S&L withdrawals.
1D
mergers in the waning hours of 1988 was too com-
plex and would eventually cost far more than au-
thorities originally estimated.
"The government will be robbed if you do not
watch these deals," said Comptroller General
Charles A. Bowsher. He warned the Senate Banking
Committee on Tuesday that future thrift rescues
need more safeguards than were included in trans-
actions completed by the Federal Savings and Loan
Insurance Corp. in the final hours of 1988.
"We believe the deals should be carefully re-
examined," Mr. Bowsher said.
And in a prepared statement delivered to House
Banking Committee Chairman Henry B. Gonzalez,
D-San Antonio, assistant comptroller general Rich-
ard L. Fogel said, "A thrift industry still exists in
Texas, but we are concerned about its viability."
Mr. Fogel's concern was raised after the GAO
completed a study of a dozen thrift mergers - in-
cluding eight in Texas - by regulators last year.
In Texas last year, authorities approved 15
transactions involving the merger of 87 insolvent
thrifts at a cost of $44 billion, allowing for inflation.
Senior GAO officials told the Senate committee
they do not believe the government can abrogate
its contracts with investors who bought Texas S&Ls
with FSLIC assistance. But they said regulators can
buy the distressed real estate held by the reconfig-
ured thrifts, as well as prepay "net worth certifi-
cates" - notes issued as capital to the S&Ls instead
of cash.
Mr. Fogel told senators that the Bush adminis-
tration's proposed thrift bailout package would al-
low for the government to pay off its financial com-
mitment early.
"We think there are sufficient powers in there
that will allow them to do that," Mr. Fogel said.
"But in doing that, you have to look at the provi-
Please see U.S. on Page 12A.
57
U.S. urged to re-examine S&L deals
Continued from Page 1A.
the costs of resolving specific groups
But even Mr. Gramm questioned
ary being paid to the thrift's chair-
sions of the contracts in each
of insolvent institutions.
the GAO about the possibility of re-
man, Dallas banker Gerald J. Ford.
deal. We do not favor abrogating the
But GAO officials warned that
moving distressed real estate assets
"That's four times what the pres-
contracts in the deals."
Congress should not overlook ways
from the restructured Texas thrifts.
ident makes," Mr. Riegle said. "It is
Also Tuesday, Kevin Gottlieb, the
to reduce the government's exposure
He agreed with the auditors that
excessive. It's just excessive."
Senate panel's staff director, said his
to deals made last year. In fact, offi-
some of the thrifts have a greater in-
Mr. Perelman and regulators are
aides are studying options to replace
cials told the Senate committee that,
centive to sell the assets at a loss to
renegotiating Mr. Ford's salary, ac-
the financing mechanism proposed
if inflation is figured in, liquidating
reap tax benefits than to maximize
cording to regulatory sources.
in the Bush administration package.
all the Southwest Plan thrifts would
their returns through prudent man-
Mr. Riegle also suggested that a
President Bush's plan calls for an en-
have been cheaper than merging or
agement.
former bank board attorney, Thomas
tity separate from the Treasury De-
closing them.
"It makes me nervous for the fed-
Vartanian, now in private practice
partment to raise $50 billion to close
Before adjusting for inflation,
eral government directly or indi-
with a Washington law firm, used
and merge insolvent thrifts.
the GAO said all the 220 S&Ls merged
rectly to be managing great quanti-
his influence to represent 55 inves-
Mr. Gottlieb said the Bush mea-
or closed in 1988 will cost $37 billion.
ties of property," Mr. Gramm said. "I
tors who bought thrifts in FSLIC-as-
sure might be amended to place caps
But Mr. Fogel said that after infla-
do not want to rush out and sell all
sisted transactions. He said this took
on appropriations and to use direct
tion, the cost will be closer to $62 bil-
of it at a fire sale, but on the other
place when regulators did not return
Treasury borrowings to give Con-
lion, a figure he said is still probably
hand, I do not want to sit on it for 15
other prospective investors' phone
gress greater oversight. In addition,
substantially below the final bill.
years, either."
calls.
borrowing costs could be reduced.
Sen. Phil Gramm, R-Texas, a
Raising other questions about
Sen. Bob Graham, D-Fla., said
The committee staff plans to
member of the Banking Committee,
the propriety of the Southwest Plan
such incidents were new examples
present specific legislative proposals
mustered a qualified defense of the
deals, senators suggested that oppor-
of how taxpayers have been victims
to senators when they return from
FSLIC and Danny Wall, chairman of
tunists were still milking the thrift
of "gang ravage" in the S&L crisis.
the Easter recess, Mr. Gottlieb said.
the Federal Home Loan Bank board.
industry and the FSLIC.
"We have nothing less than a
He also said the time frame for
"It is awfully easy to come in
Among the FSLIC-assisted deals
scandal that dwarfs anything in this
closing and merging insolvent
when the war is over and the bodies
drawing the most fire was the one
country's financial history," Mr.
thrifts might be shortened with a
are strewn here and there and sec-
that created First Gibraltar Bank of
Graham said. "The American people
modified financing plan once the
ond-guess the generals," Mr. Gramm
Dallas, backed by an investment
have every right to feel that they
Federal Deposit Insurance Corp. has
said. "The reality is Danny Wall
group led by Revlon Group Inc.
have been ravaged by this circum-
taken control of about 224 broke
never had the resources that would
chairman Ronald 0. Perelman.
stance."
S&Ls. That would be possible, Mr.
give him the broad option to close in-
Committee Chairman Donald W.
Gottlieb said, if FDIC officials are
stitutions, and as a result he always
Riegle Jr., D-Mich., expressed "moral
able to segment and clearly define
dealt from a position of weakness."
outrage" at a $1 million annual sal-
January S&L drain
tops total for '88 PC-1
MAR 15 1989
By Bob Drummond
billion in net withdrawals and 1988's
TIMES HERALD WASHINGTON BUREAU
total annual figure of $8.6 billion.
In fact, bank board chief economist
WASHINGTON - Customers
James Barth said withdrawals sur-
pulled record amounts of money from
passed deposits during January by
savings and loans in January, cutting
more than they have during any full
the troubled industry's deposits dur-
year in the bank board's history.
ing that month more than during all
Shaky and healthy institutions alike
of 1988, federal regulators announced
generally had a downswing, with 80
Tuesday.
percent of the nation's nearly 3,000
During the first month of 1989, the
thrifts seeing withdrawals outpace de-
Federal Home Loan Bank Board said,
posits.
withdrawals exceeded deposits by
Barth also estimated that the out-
more than $10.7 billion, with 30 per-
flow continued during February, when
cent of that total coming from thrifts
withdrawals are expected to outpace
in the five-state region that includes
deposits by $8 billion to $9 billion. Fi-
Texas.
nal February statistics will not be
The January figure topped both De-
cember's one-month record of $8.3
Please see S&L, C-3
by the money market funds that
out a marked rise in interest paid
and regulatory factors, singling
withdrawals to many economic
try, Barth attributed the rise in
resented a mini-run on the indus-
whether the deposit outflow rep-
available until April.
From C-1
Deflecting questions about
S&L
a role.
said,
identifying troubled S&Ls by
media also distributed stories
closed the books on 1988, the
the year, when the bank board
Shortly after the beginning of
quantify, but undoubtedly played
"Depositor nervousness," Barth
the outflow.
is most difficult to
health of S&Ls contributed to
consumer worries about the
But Barth acknowledged that
for deposits.
compete with thrifts and banks
might have shifted to nearby
"Some customers of thrifts
an industry bailout package.
to tax thrift deposits to pay for
quickly abandoned - proposal
istration's then-current - but
Barth said, was the Bush admin-
Another factor in January,
them elsewhere.'
of those institutions and place
they might take their funds out
the access to their funds, then
"If [people] get nervous about
ed withdrawals.
name, which could have prompt-
certificate of deposit at an S&L.
fered for an average three-month
points higher than the rate-of-
interest rate 1.25 percentage
money market fund offered an
During January, the average
money market accounts.
terest offered by thrifts and
ing of the difference between in-
mary factor was a sharp widen-
But Barth insisted that the pri-
or fee placed on their deposits.'
bility that there would be g tax
that there was indeed the passi-
commercial banks in the belief
59
FDIC
definitions are also insolvent.
Also, the FDIC profit total did not
About $60 billion of the assets are
include $2.3 billion of losses in the
not available for quick sale because
first half by First Republicbank
they are covered by contracts ar-
Corp. of Texas. First Republic was
Continued from Page 1C.
ranged by the Federal Savings and
merged in the third quarter with the
Loan Insurance Corp., before its role
tial writeoffs of loans.
NCNB Corp., so its first-half losses
in closing savings and loans was
were not counted.
Real estate lending problems are
assumed by the FDIC.
About $13 billion of the bank indus-
likely to be more severe in Texas and
But the $40 billion of real estate
Oklahoma than in other states, but
try's profits, or slightly more than
the FDIC expects to control, plus the
half, was paid to shareholders as
Seidman warned that there could be
$9 billion it already holds, will be
dividends.
"a' huge effect on real estate mar-
available for sale.
kets" as the FDIC begins selling
The remaining profit was enough
Seidman said recovery in real es-
assets it is acquiring from closed
to increase banks capital by 9 per-
tate prices is not helped by holding
savings and loan associations.
cent, to 6.3 percent of assets. Al-
merchandise off the market. But he
though bank capital is at a record
He noted that real estate prices
added that real estate will not be
have weakened recently in various
level, Seidman noted in his prepared
dumped, and the "sales will take
markets in the eastern part of the
comments, "a more conservative ap-
many, many years."
country.
proach would have provided a
Bank profits may drop this year
Seidman estimated that the
greater capital base to improve 1989
because non-recurring events raised
earnings."
agency would end up owning about
profits in 1988, the FDIC chairman
The profit total for the nation's
$100 billion worth of land and devel-
said.
nearly 14,000 banks included the
oped real estate from the closing of
For example, profits were raised
losses at about 14 percent of them.
550 insolvent savings institutions and
$2 billion by inclusion of past-due
Details of the profit data will be
an additional 200 to 300 that by some
interest on loans to Brazil.
announced today by the FDIC.
'88 FDIC's 'worst year ever' despite bank profits
HOUSTON CHRONICLE
By MICHAEL QUINT
Federal officials are review-
billion, to $14 billion.
Seidman said in a speech to the
participate in the program an-
New York Times
MAR
1989
ing a plan to protect fragile re-
But this year the FDIC should
New York Society of Security Ana-
break even or operate at a surplus,
nounced Friday by Treasury Sec-
gional economies from the
lysts.
Seidman said.
retary Nicholas F. Brady.
NEW YORK - Bank profits set
quick sale of billions of dollars
Looking ahead to possible prob-
of real estate repossessed from
"We expect fewer failures in
The new program calls for banks
a record in 1988, but for the Fed-
lems in real estate lending or a
1989," he said, "and no large insti-
to accept losses by voluntarily
eral Deposit Insurance Corp.,
failed thrifts: Page 2C.
weakening of the economy, he said
tutions" of the size that were
agreeing to exchange outstanding
which insures bank deposits, "it
that this year banks that have been
closed in Texas over the last year.
loans for smaller amounts of new
was the worst year ever," L. Wil-
banks in Texas led to the first
conservative lenders are likely to
Seidman said the "problem list"
securities.
liam Seidman, chairman of the
outperform those that have had
annual loss for the agency, which
now includes 1,350 banks, down 10
FDIC, told analysts Monday.
more liberal policies.
Seidman said the exchange
was organized in 1933.
percent from a year ago and 20
While bank profits totaled $25.3
Seidman said losses on loans to
needs to be supplemented by
After spending $7 billion on clos-
percent from the peak in 1987.
less-developed countries should be
changes in tax policy so that banks
billion last year, Seidman noted,
ing or merging 221 banks, the
Bank profits in 1989 are not
substantial this year, and banks
might claim tax benefits for par-
the cost of closing several large
agency's reserve fund fell by $4.2
likely to match the 1988 level,
will be under a lot of pressure to
See FDIC on Page 7C.
Study assails S&L PIA mergers
GAO favored liquidation in some '88 deals
By Robert Dodge
Washington Bureau of The Dallas Morning News
"Our analysis suggests that liqui-
"And that is not what we were deal-
dation could have been less costly
ing with."
WASHINGTON - In a highly criti-
for as many as a third of the transac-
cal report, the General Accounting
Rep. Steve Bartlett, R-Dallas, a
tions," says Charles A. Bowsher,
Office concludes that it would have
member of the House Banking Com-
comptroller general in testimony de-
been cheaper to liquidate as many as
mittee, said he was given an advance
livered to Capitol Hill on Monday
a third of the thrift mergers that fed-
description of the report during the
and obtained by The Dallas Morning
eral regulators hastily arranged in
weekend at a committee hearing in
News.
the waning hours of 1988.
San Antonio and concluded that it
Referring to the weak condition
was "one-sided."
The report, to be presented Tues-
of the FSLIC, Federal Home Loan
day to the Senate Banking Commit-
Bank Board Chairman M. Danny
"It starts off with a policy conclu-
tee, says a GAO study of a dozen
Wall said that regulators did the best
sion and then tries to make the facts
transactions showed that the 86 deals
job they could with limited re-
fit their predetermined conclusion,"
undertaken by the Federal Savings
sources.
Mr. Bartlett said. "They were not
and Loan Insurance Corp. in 1988
"Most of what they (GAO) are
seeking to report the facts. They had
will cost more than the $37 billion
talking about is if we were in a per-
written their conclusions before
estimated by federal regulators.
fect world," Mr. Wall said Monday.
Please see GAO on Page 8A.
57
GAO faults 11th-hour
thrift mergers in '88
Continued from Page 1A.
solvent savings associations. Those
they saw the facts."
benefits allow the investors to take
Mr. Wall noted that the GAO re-
losses from the distressed real estate
port calls for the deals to be re-exa-
and apply it to profits from other op-
mined under the Bush administra-
erations before paying taxes.
tion's thrift bailout plan and the rec-
According to the GAO analysis,
ommendation is made with the
the tax benefits in the 86 transac-
qualification that the option to
tions for 1988 will total between $7
unwind the deals "depends on the
billion and $8 billion, or about 20
availablility of adequate funding."
percent to 40 percent more than pro-
"That is the best endorsement I
jected by FSLIC.
have seen of our contracts," Mr. Wall
"FSLIC did not have sufficient in-
said. When I read that, I said, 'What
formation to undertake an evalua-
tion of tax benefits at the time the
Danny Wall
says regula-
the hell else does the rest of this
mean?'
transactions were approved," Mr.
tors did the best job they
But the GAO report questions
Bowsher says in his prepared testi-
could with limited resources.
whether the S&L deals created viable
mony, noting that the agency did not
says liquidation would have been im-
new thrifts.
make its estimates until after the
possible until 1989 or 1990, when the
The GAO, the investigative arm of
deals were closed in January.
cost of closing insolvent thrifts
Congress, says the newly merged
"It seems highly unlikely that the
would have substantially risen, mak-
S&Ls are thinly capitalized and do
FSLIC got full value for these bene-
ing that option even more expensive.
not have incentives to responsibly
fits in all the transactions," Mr.
"They (GAO) are not really talk-
manage their distressed real estate
Bowsher says.
ing about apples and apples here,"
assets. Yet it notes the restructured
Taking all factors together, the
Mr. Wall said. "We did not have that
thrifts have been given the author-
GAO said it may have been cheaper
option."
ity to undertake new investment ac-
to liquidate many of the insolvent
Another reason the deals may
tivities normally allowed only for in-
thrifts rather than combine them in
turn out to be more expensive than
stitutions with strong capital.
the government-assisted mergers.
anticipated, the GAO says, is that re-
Of the dozen analyzed deals,
"If the full cost of the deals to the
gulators did not do an adequate job
which created 15 new thrifts, the
federal government is considered,"
of soliciting potential bidders. The
GAO found that about half the insti-
Mr. Bowsher says, "our analysis sug-
report says the process forced buyers
tutions had capital of less than 3 per-
gests that liquidation could have
to acquire less-desirable insolvent in-
cent of their assets. Regulators now
been cheaper in as many as a third
stitutions in packages with other
require savings associations to main-
of the transactions we reviewed."
thrifts and required bids to be sub-
tain a minimum capital ratio of 3 per-
But Mr. Wall argues that FSLIC
mitted without knowing precisely
cent, a level that will be raised to 6
did not have the cash resources to
which S&Ls were to be included in a
percent under the Bush administra-
close S&Ls and pay off depositors. He
package.
tion's thrift bailout plan.
"The assisted thrifts have certain
financial advantages and protections
that unassisted depository institu-
tions do not," Mr. Bowsher said in
his prepared testimony. "The advan-
tages stem from the relatively low
level of acquirer capital, the FSLIC
assistance and guarantees, forbear-
ances and the tax savings."
Moreover, the GAO questions
whether the FSLIC has adequate re-
sources to monitor the complex
transactions.
But Mr. Wall argued the GAO cap-
ital analysis was faulty because it did
not consider that the FSLIC is pro-
tecting many of the reconfigured
S&Ls from future losses from dis-
tressed real estate assets. He argued
that capital ratios should be figured
excluding the distressed assets.
"To say they are thinly capitalized
is to ignore the FSLIC coverage," Mr.
Wall said.
The GAO says the cost of the deals
will be higher than anticipated
partly because the FSLIC failed to ac-
count fully for the cost of tax bene-
fits to investors who bought the in-
58
Gonzalez says
S&L: Regulator blasted
S&L from A1
before the committee.
"
S&L regulator
"I think Danny Wall has done a
masterful job in a very difficult po-
sition," he said. "Not perfect. but
It was an obvious
should resign
pretty good."
effort to mislead, to
Gonzalez disagreed strongly.
"I'm not in that forgiving mood
obscure and to
any longer," he said.
minimize the
"Throughout this long fight to de-
By DAVID J. SHAFFER
velop a sane approach to the prob-
problem.
Business reporter
lem, the Congress and the Ameri-
can public have been handicapped
- REP. HENRY B. GONZALEZ
U.S. Rep. Henry B. Gonzalez asked Friday for the
by a blizzard of conflicting num-
About the S&L crisis handling
resignation of M. Danny Wall, the nation's top savings
bers about the size and cost of the
and loan regulator, accusing him of lying to Congress
crisis. I truly fault
Wall for his
29
about the depth of the S&L crisis.
performance on this score through-
"Time and time again he has misled the Congress."
out 1988 - the Wall Number-Of-
Gonzalez said during a hearing of the House Banking
The-Month-Club. I call it. It was an
Committee in San Antonio.
obvious effort to mislead, to ob-
said U.S. Rep. Steve Bartlett. R-Dal-
Gonzalez is chairman of the committee, which was
scure and to minimize the prob-
lem." Gonzalez said during his
las. That echoed President Bush's
scheduled to resume
its hearings at 9 a.m.
opening statement.
no-tax pledge during the presiden-
INSIDE
today at 514 W.
Wall also came under fire for the
tial election campaign.
Testimony begins in local
Commerce.
rapid succession of thrift mergers
In other testimony. Barclay
S&L trial-
Page B1
In 1987, Wall esti-
lie completed in the final weeks of
urged Congress to reconsider pro-
S&L hearings attract
mated the Federal
1988.
posed rules that would require
diverse crowd
Page E1
Those deals included millions of
S&Ls to increase capital levels
Savings and Loan In-
dollars in tax benefits for
from the current 3 percent mini-
surance Corp. was in-
solvent by roughly $17 billion, but a recent study
acquirers, who often bought multi-
mum to 6 percent of assets by 1991.
shows the depth of the problem has at least quadru-
billion-dollar institutions with rela-
Capital is an institution's own sav-
pled. said Frederick Wolf, chief thrift auditor of the
tively small capital investments.
ings, which serves as a cushion
General Accounting Office, Congress' investigative
"Those deals were terribiv ex-
against future losses.
arm.
pensive and probably more expen-
Few S&Ls in Texas could reach
That news angered Gonzalez, who said Wolf's testi-
sive than other things they could
the 6 percent capital level by 1991,
Barclay said.
mony directly contradicted information Wall gave
have done," Wolf said.
earlier this year.
For example, the deposits of ail-
Of roughly 100 remaining solvent
"After the documented testimony by the GAO,
ing institutions could have been
S&Ls in the state, Barclay said, "I
there is no question that Mr. Wall. in a sustained and
transferred to other S&LS, and the
think 50 will make it and about 50
calculated fashion. deceived the Congress. I just find
government could have retained
won't.
that unforgivable." Gonzalez said.
control of the assets, Wolf said.
Some administration officials are suggesting Wall,
That would have eliminated the
"Of the 50 that will make it. may-
now chairman of the Federal Home Loan Bank Board
need to pay costly yield mainte-
be 10 will achieve 6 percent capital
and the FSLIC. should be given another regulatory job
nance, which amounts to a guaran-
by 1991."
under President Bush's plan to rework the thrift
teed profit. on the non-performing
industry.
assets assumed by surviving institu-
"I can't think of anything that would be more dis-
tions.
If Congress wants to mandate 6
percent capital by 1991. it should
gusting to us in the Congress." Gonzalez said. "The
Congress should examine those
create a special "community ser-
Congress and the public. which have been
misin-
deals, because It is possible Wall
vice" category for those S&Ls that
formed, should insist that the people involved step
went beyond his authority in offer-
are solvent in 1991 but don't meet
aside."
ing guarantees to acquirers of in-
the new capital level, he said.
George Barclay, president of the Federal Home
solvent thrifts, Gonzalez said.
Loan Bank of Dallas. defended Wall after appearing
The ultimate cost of resolving the
Thrifts in that category would be
Please turn to S&L. A18
thrift crisis will be at least $99 bil-
limited to providing mortgage
lion. with the potential to go higher,
loans, basic deposit services and
Wolf said.
other community service functions
The Bush administration's latest
until they reach the 6 percent capi-
estimate IS $110 billion.
tal level. Barclay said.
Despite the high cost. Congress
should address the S&L crisis "on-
That would give those thrifts
budget." rather than using private
time to recover and avoid addition-
placement of bonds. because Trea-
al thrift closings. which would in-
sury borrowings would cost taxpay-
ers $3 billion less in interest pay-
crease the cost to the government.
Barclay said.
ments, Wolf said.
It would less expensive. in the
long run. to raise taxes to pay for
The committee hearings in San
the rescue, rather than by borrow-
Antonio are the first steps toward
ing $50 billion, as suggested under
producing legislation based on
Bush's plan, Wolf said.
Bush's thrift revitalization propos-
Borrowing the money will in-
al, made just after he came into
office.
crease the cost to taxpayers by
roughly $138 billion.
Bartlett said he hopes Congress
But Congress will not raise taxes,
will move quickly on the thrift issue
and get legislation to Bush's desk by
the end of March.
30
Issue 89:2
February 1989
FISCALI NOTES
Bob Bullock, Texas Comptroller of Public Accounts
Economic Analysis Center
Texas rebound shifts
Index
to expansion in 1989
exas is on the
T
rebound to a
90,000 new jobs expected in 1989
healthy econ-
omy and is
expected to
Goods-producing jobs-11,000
add 90,000 new jobs
Texas closeup
during 1989, setting a
Job change*
Border bolstered by
record with 6.7 million
Manufacturing
14,000
Mining (oil and gas)
0
twin plants. Page 3.
Texans gainfully em-
Construction
-3,000
Central Corridor
ployed by year's end.
Since the recession's
Service-producing jobs-79,000
recovery accelerates.
Page 4.
low point in spring
Trade
28,000
1987, the state has
Services
.23,000
East Texas boosted
by timber gains.
gained 176,000 jobs and
Government
15,000
Transportation and utilities
9,000
Page 5.
recovered 80 percent of
Finance, insurance and
the jobs lost during the
real estate
Gulf Coast rebound
3,000
continues. Page 6.
1986-87 recession. Un-
employment has dropped
Total new nonfarm-90,000
Metroplex gets back
on track. Page 7.
nearly three points, to
about seven percent by
*Totals may not add
Plains continues
the end of 1988.
due to rounding.
turnaround. Page 8.
Assuming the U.S.
Source: Bob Bullock, Comptroller of Public Accounts.
economy remains heal-
The major force be-
about the same as the
thy and oil prices are
hind Texas' recovery
national economy. Per-
Texas at a glance
relatively stable in the
will continue to be man-
sonal income will in-
Financial Tables
current range, Texas'
ufacturing, as it bene-
crease by more than 7
economic growth will
fits from the lower dol-
Pages 9-11.
percent. The state will
continue through 1989.
lar and increasing com-
gain almost 200,000 in
By the end of the year,
petitiveness of U.S. ex-
population and more
recovery will turn into
ports. But most of the
people will move to
expansion as statewide
new jobs will be in trade
Texas than leave.
employment surpasses
and services. Oil and
its late-1985 peak.
gas are expected to re-
Key factor: Manufac-
"Texas has weathered
main relatively stable,
turing will continue to
the oil-bust years well,"
and real estate and con-
lead the recovery in
said Comptroller Bob
struction should hit bot-
1989, but the rate of
Bullock. "We've re-
tom in the middle of the
growth will slow some-
Business outlook
gained most of the
year.
what from 1988's rapid
improves for 1989
ground we lost, and the
Page 12.
In 1989, the overall
pace as the positive ef-
state's outlook contin-
Texas economy will
fects of the declining
ues to improve."
grow by 2.4 percent,
See page 2
dollar diminish and the
cent of the state econo-
Statewide construc-
U.S. economy slows.
my, down from a peak of
tion employment will
Overall, manufactur-
27 percent in 1981.
probably hit bottom
ing employment will in-
A protracted decline
around the middle of
crease approximately
in oil prices below $15
the year. Overall, con-
14,000, or 1.5 percent.
per barrel could lead to
struction employment
Electronics, computers,
additional job losses in
will decline by 3,000 or
and print-
oil and gas, but prices
1.0 percent during the
Texas nonfarm employment
ing and
would have to fall to $10
entire year.
publishing
or below for six months
In millions
will provide
or longer in order to pull
New jobs: While Texas'
6.70
6.65
most of the
the overall state econo-
economic recovery is be-
Seasonally
6.65
new manu-
my into recession.
ing driven by manufac-
adjusted
facturing
turing, most of the new
6.60
jobs during
Building hits bottom:
jobs will be in services.
6.55
the year.
The Texas construction
Just like the United
Petrochem-
industry appears close
States, Texas is becom-
6.50
icals, while
to bottoming out. Resi-
ing an increasingly ser-
6.45
not a major
dential and nonresiden-
vice-based economy.
'86
'87
job genera-
tial construction have
'88
In 1989, Texas will
tor,
will
stabilized, existing
gain a total of 79,000
SOURCES: Texas Employment Commission and
continue to
Bob Bullock, Comptroller of Public Accounts.
home sales are up,
service-producing jobs.
add produc-
housing permits are
Spurred by a five-plus
tion capacity with new
slowly increasing and
percent increase in
plants and expansions.
apartment and office va-
gross retail sales, em-
More than 150 new
cancy rates are gradual-
ployment in wholesale
petrochemical projects
ly declining.
and retail trade will be
valued at $5.0 billion
Despite these positive
up by 28,000 (1.7 per-
are planned or under
signs, the future growth
cent). Business, health
THE
construction in the
of Texas's construction
and other miscellaneous
OF
Houston area alone.
industry will be severe-
services will grow by
OFFICE
COMPTROLLER
Also during the year,
ly limited by high va-
23,000 (1.5 percent) and
groundbreaking will be-
cancy rates and massive
government employ-
gin on the $1.3 billion
overbuilding. A signifi-
ment will increase by
Formosa Plastics com-
cant rebound in the
15,000 (1.3 percent),
plex in Point Comfort,
state's construction in-
mainly because of gains
FISCALNOTES
which eventually will
dustry remains at least
at the local level.
employ 1,700 people.
two or three years away.
In 1989, however,
Gone to Texas: As new
Energy stable: The re-
housing and nonresi-
job opportunities ap-
Articles and analysis ap-
cent OPEC agreement
dential construction will
See rebound, page 9
pearing in Fiscal Notes
do not necessarily repre-
should help stabilize oil
recover
sent the policy or en-
prices at around $15 to
from all-
dorsement of the
$16 per barrel and al-
time lows.
Texas unemployment rate
Comptroller of Public Ac-
low oil and gas drilling
Housing
counts.
activity and employ-
starts will
Percent
Seasonally adjusted
Space is devoted to a
ment to remain steady
increase
10.0
3-month moving average
wide variety of topics of
Texas interest and general
through the end of
from 1988's
9.5
government concern.
1989.
42,000 to
9.0
Oil and gas remains
53,000, and
7.13
Contributers to this issue
8.5
include: Charles Aki, Ed
a major industry in
total non-
8.0
Baldwin, Don Kiser, Roy
Texas, but the diversifi-
residential
7.5
Morey, Dwain Osborne,
cation of the Texas econ-
construc-
Audrey Pennington, Gary
7.0
omy has greatly re-
tion will
Preuss, Tom Plaut and
6.5
Dan Thompson.
duced the state's depen-
rise from
dence on this single in-
54.3 to 61.0
'86
'87
'88
dustry. Oil and gas ac-
million
SOURCES: U.S. Bureau of Labor Statistics and
counts for about 15 per-
square feet.
Bob Bullock, Comptroller of Public Accounts.
2 February 1989, FISCAL NOTES
Texas closeup
The Border
El Paso
Twin plants bolster Border
he Border area's economy outperformed all
T
other regions in 1988, spurred by continued
manufacturing growth, improved agricultural
outlook and a more stable energy industry.
The Border is being helped by expansion in "twin
Laredo
plants" and related transportation industries, growth in a young electronics
sector and a resurgence in retail trade.
McAllen
The 30-county Border region, which includes Brownsville, McAllen, Laredo
Brownsville/
and El Paso, will gain 8,300 nonfarm jobs in 1989, up 1.8 percent, to
Harlingen
465,900.
Manufacturing:
A broad range of Border manufacturers-apparel high-tech electronics prod-
ucts, transportation equipment, rubber and plastics-were helped by the falling
dollar in 1988.
In 1989, manufacturing employment likely will grow by 1,100, or 1.7 percent,
to 67,100. It will be led by solid job gains in food products and continuing
growth at high-tech firms such as General Dynamics' plant in Harlingen, which
is building components for the Atlas I and II and Titan Centaur missiles.
The twin plant or maquiladora industries in Mexico will expand and diversify
due to low labor costs and proximity to U.S. markets. Growth in increasingly
capital-intensive twin plants, such as automotive suppliers, will boost related
manufacturing and support services located on the Texas side of the Border.
Trade:
1989 forecast: Border
The value of the peso fell sharply in November 1987 after
runaway inflation and a stock market collapse. And Border
trade was weakened by uncertainties over future peso deval-
uations.
But the 1987 devaluation was not devastating, as first ex-
pected. A more open Mexican trade policy, which eliminated
import sanctions against U.S. electronics goods, has boosted
Border retail trade.
In 1989, although peso devaluations may still plague Border
Population
Unemployment
Nonfarm
stores, trade employment should increase by another 2,100,
1.766 million
10.8%
employment
or 1.7 percent, to 122,500.
up 2.1%
(1988 jobless
465,900
from 1988
rate: 12.6%)
up 1.8%
Agriculture:
Source: Bob Bullock, Comptroller of Public Accounts.
Agricultural output in the Border remained strong in 1988. Ranchers in part of
the Border region, particularly in the Laredo-Del Rio area and west, were hit
hard by the drought and forced to sell off livestock. But prices remain high, al-
though livestock receipts may be down from 1988.
Citrus production in the Lower Rio Grande Valley is coming back after several
disastrous freezes, and the Valley's sugarcane producers are recovering from
the 1983 freeze. The improved farm situation is boosting the Border's whole-
sale trade, transportation and food processing industries.
Population and unemployment:
Although remaining high, the Border unemployment rate will continue to drop
from 13.3 percent in 1987 to 10.8 percent in 1989.
Border population growth outpaced all other regions in 1988. With new jobs
opening up in manufacturing and trade, population growth will continue at 2.1
percent and population will reach 1.766 million in 1989.
February 1989, FISCAL NOTES 3
Texas closeup
Central Corridor
Central Corridor recovery accelerates
rom 1980 to 1986, the economy of the Central Corridor outpaced all other re-
Waco
F
gions in Texas. But in 1987, the region's economic fortune turned down, with a
Killeen/
major shakeout in high-tech manufacturing and the end of a construction boom.
Temple
Weaknesses in construction, banking and real estate will continue to plague
the Central Corridor region in 1989. But nonfarm employment will slowly pick
Austin
Bryan/
up and continue to grow, although at somewhat less than the state rate.
College
The high-tech sector, on the decline since 1985, led a modest recovery in 1988 in the
Station
San Antonio
39-county Central Corridor region-including San Antonio, Austin, Waco, Killeen-Tem-
ple and Bryan-College Station.
In 1989, nonfarm job gains will accelerate, as the construction industry bottoms out
and banking and real estate start to pick up. Nonfarm employment will jump by 11,600,
or 1.0 percent, to 1.177 million in 1989.
Manufacturing:
High-tech job gains will be a major source of growth. Gains are expected in electron-
ic components, computers and instruments. The lower dollar will continue to spur ex-
ports and make high-tech goods more competitive domestically, as well. Manufactur-
ing employment will increase by 1,600, or 1.3 percent, to 126,200 in 1989.
Other manufacturing industries important in the Central Corridor, such as food
products and printing and publishing, will also add jobs.
Construction:
A slowdown in the construction industry continued throughout 1988 and damp-
ened overall job growth. Austin and San Antonio have both endured a painful con-
struction bust, which will not end until surplus commercial and residential space is
absorbed.
In 1989, construction employment should finally bottom out at 54,200, down by
1,300 jobs, or 2.3 percent.
Trade and services:
1989 forecast: Central Corridor
Many of the new jobs in 1989 will come in the Central Corri-
dor's service-producing industries. As construction losses sub-
side, 1989 trade employment likely will increase by 2,800, or
1.0 percent, to 286,800.
Other gains are expected in health and legal services and in
high-tech services such as computer programming and soft-
ware development, data processing and research laboratories.
In 1989, 3,900 service jobs should be added, an increase of
Population
Unemployment
Nonfarm
1.4 percent, to 277,800.
3.179 million
6.2%
employment
Government:
up 1.2%
(1988 jobless
1,176,700
from 1988
rate: 6.7%)
up 1.0%
State and local government has been a source of steady
growth. Teaching, counseling and administrative jobs at elemen-
Source: Bob Bullock, Comptroller of Public Accounts.
tary and secondary schools have increased, and new court-
mandated jobs have opened up at state government agencies
such as the Department of Corrections and Mental Health/Mental Retardation.
In 1989, government jobs will continue to grow by 3,200, or 1.1 percent, to
299,200. Federal government employment should increase slightly, but military and
related civilian employment at bases in San Antonio, Austin and Killeen may contin-
ue to slip some due to federal defense cutbacks.
Population and unemployment:
In 1989, with construction finally hitting bottom, the unemployment rate will drop to
6.2 percent.
As fewer people move to the Central Corridor, population will grow somewhat
slower, increasing by 1.2 percent, to 3.179 million.
4 February 1989, FISCAL NOTES
Texas closeup
East Texas
Timber gains boost East Texas
he East Texas economy depends primarily on agriculture, timber and oil. The outlook
Texarkana
T
for these industries in 1989 is positive or stable.
Overall, the 35-county region, which includes Longview-Marshall, Tyler and
Longview/Marshall
Texarkana, should add 5,600 nonfarm jobs in 1989, a gain of 1.5 percent to 384,000,
as the area's troubled energy and construction industries continue a slow comeback.
Tyler
East Texas escaped the oil-price recession much better than the Plains and the Gulf Coast,
and now with oil prices relatively stable, employment in East Texas' energy industry has firmed.
A resurgence in the forest products industry has spearheaded East Texas' turnaround. With
world demand for timber rising and supplies declining, prices have moved up sharply. And set-
tlement of a trade dispute with Canada has trimmed timber imports.
Now East Texas timber, pulp and paper producers are benefiting from increased output and
profits. Capacity is growing, and the region is reaping gains in jobs and income.
Manufacturing:
About 18 percent of the region's employment growth in 1989 will come from
1,000 new manufacturing jobs, an increase of 1.3 percent to 80,900.
Some manufacturing job growth will continue in the forest products industry after
big expansions in plant capacity in 1988.
Increased output and employment are also expected in other manufacturing in-
dustries important in East Texas-food products, printing and publishing and
transportation equipment.
Trade and services:
1989 forecast: East Texas
The bulk of new nonfarm jobs created in East Texas will be in
the trade and service sectors. With tourism boosting retail trade
activity in the region, trade jobs will rise by 1,100, or 1.3 per-
cent, to 91,200.
Health and business services should continue robust growth.
And legal, educational and amusement services will gain jobs.
In 1989, East Texas will add another 1,200 service jobs, up by
1.8 percent, to 71,300.
Population
Unemployment
Nonfarm
Agriculture:
1.229 million
7.7%
employment
Relatively high price and production levels for livestock boost-
up 0.9%
(1988 jobless
384,000
ed East Texas agriculture in 1988. But parts of the region have
from 1988
rate: 8.2%)
up 1.5%
been hit hard by lack of rainfall, and forage production is down
Source: Bob Bullock, Comptroller of Public Accounts.
sharply.
Overall, East Texas agricultural prospects are mixed, but farm receipts proba-
bly will not match 1988 levels because of the aftereffects of the drought.
Population and unemployment:
As manufacturing leads renewed job growth in the region, East Texas' unem-
ployment rate will continue to drop, to 7.7 percent in 1989.
The region's population will grow faster than in 1988, jumping by 0.9 percent in
1989, to 1.229 million.
February 1989, FISCAL NOTES 5
Texas closeup
Gulf Coast
Beaumont
Gulf Coast rebound continues
Houston
ssuming oil prices remain relatively stable in the current range and the U.S. econo-
A
my stays healthy, the entire Texas Gulf Coast should continue to rebound in 1989,
Galveston
outpacing all other regions of Texas.
Brazoria
The falling dollar, which makes U.S. products more competitive in world markets,
Victoria
has spurred a broad-based resurgence in Gulf Coast manufacturing activity, partic-
ularly in the petrochemical industry.
Corpus Christi
The Formosa Plastics project in Calhoun County will be the largest ethylene plant ever built at one
time, and will have an $85 million annual payroll when it is running at full speed. Quantum Chemical
will spend $400 million on ethylene and polyethylene expansions at its Houston and Deer Park plants. Most other Gulf
Coast chemical and plastics makers-Chevron, Exxon, Rohm and Haas Texas-also have announced expansions. All
these projects are generating renewed activity in construction and related engineering services.
The Gulf Coast's energy industry stabilized and even added some jobs in 1988.
The region's aerospace and medical complexes, which helped to bolster the economy during the energy industry down-
turn, are emerging as important expansion industries and hold the key to long-term growth. These complexes are stimu-
lating the development of spinoff or start-up companies in aerospace and biotechnology which will promote economic di-
versification in the years ahead.
In 1989, total nonfarm employment in the 32-county Gulf Coast region-including Houston, Galveston, Brazoria, Beau-
mont, Corpus Christi and Victoria-should increase by 37,900, or 1.9 percent, to nearly 2.0 million.
Manufacturing:
Manufacturing will continue a rebound that began in the second half of 1987.
In 1988, a broad range of Gulf Coast manufacturers were helped by the lower dollar.
And a small increase in oil and gas exploration activity boosted oil-field equipment
manufacturing. With continued growth in exports, the region's electronic industries
added some employees in 1988. And a good mix of other manufacturers-including
fabricated metals, chemicals and plastics, transportation equipment, lumber and wood
and printing and publishing-expanded their work force.
But in 1989, as energy-related and export-related job gains diminish,
1989 forecast: Gulf Coast
manufacturing job growth will slow. However, manufacturing employ-
ment still will increase by 3,800, a solid gain of 1.7 percent, to 235,000.
Trade and services:
Service-producing jobs will increase. Health and business
services, in particular, should continue robust growth. And le-
gal, educational and amusement services will gain jobs. A total
of 9,400 service jobs will be added in 1989, an increase of 2.0
percent, to 482,100.
Population
Unemployment
Nonfarm
Wholesale and retail trade will be boosted by a comeback in
4.908 million
6.2%
employment
the construction, financial services and real estate industries.
up 1.0%
(1988 jobless
1,997,100
In 1989, total trade employment will rise by 14,300, or 3.0 per-
from 1988
rate: 7.4%)
up 1.9%
cent, to 498,600.
Source: Bob Bullock, Comptroller of Public Accounts.
Aerospace:
Assuming Congress continues to fund the space station contract, the Johnson
Space Center near Houston will spend $226 million over the next five years to mod-
ernize its facilities and add new support. As defense and NASA contracts come in,
Grumman Corp. will triple its Houston work force to 2,000 over the next three years
at the Southwest Regional Development and Production Center.
Population and unemployment:
As job opportunities continue to expand, the Gulf Coast's unemployment rate will
continue to drop, to 6.2 percent in 1989.
In 1989, population gains will pick up some as more newcomers move to the re-
gion. Population will increase by 1.0 percent, to 4.908 million.
6 February 1989, FISCAL NOTES
Texas closeup
Metroplex
Metroplex gets back on track
n the first half of the 1980s, the Metroplex economy boomed, fueled by growth in defense and
I
high-tech manufacturing and a building frenzy. But in 1987, the construction boom came to a
Sherman/
screeching halt and the Metroplex lost jobs for the first time this decade. The continuing shake-
Denison
out in construction, real estate and banking dampened Metroplex economic growth in 1988.
Ft. Worth
But overall nonfarm employment rebounded some, with big gains in defense-related
manufacturing, and the economic recovery should gather steam in 1989. Nonfarm job gains in
Dallas
the 20-county Metroplex region-including Dallas, Fort Worth and Sherman-Denison-wil ac-
celerate in 1989, as the construction industry bottoms out and financial services begin a slow
turnaround. Nonfarm jobs should increase by 20,100, or 1.0 percent, to more than 2.0 million.
The area's long-term growth prospects are particularly bright in light of recent decisions to lo-
cate the Superconducting Supercollider project, a consolidated headquarters for GTE and a major
office, research and manufacturing complex of Fujitsu America in the Metroplex region.
Manufacturing:
Most new manufacturing jobs in 1988 were in defense and high-tech industries,
and chemicals, plastics, primary metals and leather manufacturers also did well.
In 1989, job growth in manufacturing will continue at a steady pace, with high-tech
industries gaining most. But employment gains in defense industries will be modest,
as federal defense spending slows. Manufacturing employment will increase by
5,800, or 1.6 percent, to 378,900.
Construction:
Job layoffs in construction continued throughout 1988, with
1989 forecast: Metroplex
foreclosures at record highs. Both residential and nonresiden-
tial markets remain extremely overbuilt, and employment will
drop further in 1989 before bottoming out.
In 1989, Metroplex construction employment will dip by an-
other 2,800, or 3.5 percent, to 76,400.
Transportation, communications:
The Metroplex transportation network, centering around the
Population
Unemployment
Nonfarm
Dallas/Fort Worth International Airport, is a major impetus to
4.231million
5.5%
employment
growth in air transportation, trucking and warehousing and
up 0.9%
(1988 jobless
2,007,900
telecommunications services. With travel demands booming,
from 1988
rate: 6.1%)
up 1.0%
air transportation will continue to record big job gains.
Transportation, communications and public utilities led 1988
Source: Bob Bullock, Comptroller of Public Accounts.
Metroplex job growth, and fast-paced growth should continue. In 1989, employment
should increase by 3,300, or 2.5 percent, to 136,900.
Trade and services:
Trade employment, weakened by the downturn in construction and in consumer
spending, should rebound in 1989. Trade jobs will rise by 5,800, a gain of 1.1 percent,
to 521,800. The relocation of J.C. Penney headquarters from New York to Plano will be
a big boost for trade, providing about 3,800 new jobs for the Metroplex.
The growth in services, which continued through much of 1988, will slow as these in-
dustries feel the ripple effects from weak construction and real estate activity. In 1989,
service industries will gain 4,800 jobs, up by 1.1 percent, to 461,300.
Population and unemployment:
Due to a big slowdown in newcomers, coupled with some employment growth, the
Metroplex unemployment rate dropped in 1988, and as job growth picks up in 1989,
it will slip to 5.5 percent.
The frantic pace of new arrivals during the boom years has ended and Metroplex
population is expected to grow more slowly. In 1989, population will increase by 0.9
percent, to 4.231 million.
February 1989, FISCAL NOTES 7
Texas closeup
Plains
Plains continues turnaround
Amarillo
he Plains economy should continue to rebound in 1989, assuming
T
stable oil prices and a healthy U.S. economy.
The 98-county Plains region-including Abilene, Amarillo, Lub-
Lubbock
bock, Midland, Odessa, San Angelo and Wichita Falls-posted
Wichita
solid nonfarm job gains in 1988.
Falls
The Plains was helped by a recovery in the oil and gas industry and by the
lower value of the dollar, which made its manufactured goods more competi-
tive worldwide.
Midland
Abilene
In 1989, with employment in oil and gas stabilizing, job growth will slow
Odessa
San
some, but the area's battered banking and real estate industries should be-
Angelo
gin to come back. Overall, Plains nonfarm employment will increase by
6,400, or 1.0 percent, to 631,200.
The price of energy dependence was high, but a leaner Plains economy, far
less susceptible to changes in the price of oil, is emerging.
Manufacturing:
In 1988, manufacturing led the recovery in the Plains region, generating new
jobs in food products, apparel, transportation equipment, electronics, fabricated
metals and plastics. And a small increase in oil and gas exploration activity
boosted oil-field equipment manufacturing.
In 1989, with energy-related and export-related job gains diminishing, manufac-
turing job growth will slow. Manufacturing employment will be up by 600, or 0.8
percent, to 71,800.
Trade:
Trade should continue on the upswing, following increases in consumer spend-
ing. Wholesale and retail trade gains may slow some in 1989 as oil and gas ac-
tivity stabilizes. But trade jobs will increase by 1,900, or 1.2 percent, to 164,500
in 1989.
Agriculture:
West Texas ended 1987 with a bumper cotton crop, record-setting yields and
prices higher than they have been since 1980. And even though prices slipped
some, 1988 was another good year for cotton.
Livestock receipts were also up sharply in 1987, and continued high prices
helped beef producers in 1988. In 1989, profit margins may shrink some due to
rising grain prices.
Population and unemployment:
1989 forecast: Plains
Unemployment will continue to slide in 1989 to 5.3 per-
cent as all sectors of the Plains economy, including bank-
ing and real estate, add jobs. And population growth will
gather steam as increasing job opportunities attract new-
comers. Population will increase by 1.0 percent, to 1.845
million in 1989.
Population
Unemployment
Nonfarm
1.845 million
5.3%
employment
up 1.0%
(1988 jobless
631,200
from 1988
rate: 6.1%)
up 1.0%
Source: Bob Bullock, Comptroller of Public Accounts.
8 February 1989, FISCAL NOTES
Texas production and consumption indicators
(Amounts in millions)
Motor fuel
Cigarette
Year and
Crude oil
Natural gas
Gallons
Cement
pkgs.
Auto sales
month
Bbls.
Value
MCF
Value
Gasoline
Diesel
Tons
taxed
net value
1986
January
69.3
$ 1,797.7
494.7
$ 928.9
694.6
135.4
0.97
144.1
$ 1,213.1
February
62.5
1,227.5
454.9
788.6
645.6
123.6
0.75
134.4
1,332.2
March
68.7
1,001.8
468.3
783.7
746.7
147.9
0.87
132.6
1,532.2
April
65.6
827.7
435.1
677.0
727.1
128.2
0.94
158.0
1,489.3
May
65.8
851.3
453.6
653.6
750.7
127.3
0.88
152.1
1,521.0
June
63.0
824.7
427.9
590.1
732.5
92.5
0.69
157.8
1,472.6
July
65.3
741.6
450.3
610.4
770.2
134.2
0.91
158.4
1,426.9
August
63.1
764.2
443.4
603.5
710.9
131.6
0.78
141.7
1,615.7
September
61.8
825.1
405.3
554.0
693.5
130.0
0.81
144.6
1,518.4
October
63.1
833.0
414.1
558.1
712.6
137.0
0.73
144.5
991.8
November
60.4
797.8
416.0
571.6
670.9
120.2
0.55
123.0
1,264.5
December
62.6
863.9
461.6
634.5
753.7
134.8
0.49
172.8
1,326.9
Total
771.3
$11,356.3
5,325.2
$7,954.0
8,609.0
1,542.7
9.37
1,764.0
$16,704.6
1987
January
62.0
$ 1,008.9
452.6
$ 634.2
650.9
110.7
0.69
147.9
$ 1,102.0
February
56.2
934.3
410.3
570.9
596.6
111.9
0.60
120.0
1,164.8
March
63.0
1,049.4
442.2
609.0
700.9
135.4
0.79
128.8
1,356.9
April
60.5
1,019.1
436.7
583.2
697.7
124.6
0.82
136.5
1,377.4
May
60.5
1,054.3
429.5
560.7
690.6
120.4
0.66
135.0
1,347.0
June
58.8
1,060.4
420.5
539.9
691.6
129.4
0.65
159.3
1,548.8
July
60.7
1,151.3
414.9
544.4
742.7
124.6
0.79
163.6
1,521.9
August
59.8
1,142.0
422.3
544.7
715.2
120.6
0.73
160.4
1,579.3
September
58.5
1,062.1
410.5
509.4
684.7
129.0
0.69
158.7
1,229.0
October
60.8
1,100.4
426.7
533.1
744.5
156.3
0.79
130.5
1,016.0
November
57.8
1,028.3
430.9
564.0
665.1
109.4
0.59
97.8
1,163.3
December
59.7
994.6
497.7
667.3
717.0
124.0
0.58
143.8
1,149.0
Total
718.3
$12,605.1
5,194.7
$6,860.9
8,297.5
1,496.3
8.38
1,682.3
$15,555.4
1988
January
59.8
$
950.7
456.2
$ 732.6
630.3
111.7
0.52
122.0
$ 1,150.0
February
56.2
884.6
464.9
680.8
649.6
113.8
0.57
124.2
1,364.6
March
60.2
908.3
450.5
637.2
731.2
133.3
0.69
132.1
1,448.5
April
57.8
931.4
444.8
546.7
699.5
114.2
0.69
125.8
1,433.7
May
58.5 r
961.1 r
420.7 r
551.7 r
722.2
115.4
0.71
139.5
1,524.0
June
57.0 r
896.1 r
405.1 r
523.1 r
723.3
133.4
0.70
141.3
1,405.4
July
55.5 e
793.9 e
459.3 e
606.3 e
718.8
117.2
0.58 r
124.7
1,512.5
August
54.1 e
765.8 e
425.5 e
600.0 e
741.9
125.9
0.63 r
134.9
1,217.2
September
51.8 e
702.4 e
436.8 e
550.4 e
691.2
131.7
0.55 r
141.6
1,414.1
October
47.0 e
596.0 e
693.2
123.8
0.61
132.4
1,206.2
November
52.1 e
644.5 e
0.57
129.3
1,127.9
December
140.2
Total
610.0 e
$ 9,034.8 e
3,963.8 e
$5,428.8 e
7,001.2
1,220.4
6.83
1,588.0
$ 14,804.1
e - estimated
r - revised
Note: Crude oil and natural gas show taxable production and net taxable value for the production month.
Totals may not add due to rounding
Bob Bullock, Comptroller of Public Accounts.
Rebound, from page 2
pear, outsiders will once
cent, during the year.
Texas defined by the
solid recoveries follow-
again begin moving to
Despite the growing
Comptroller are expect-
ing severe economic
Texas.
population, Texas' unem-
ed to add jobs, income
downturns in 1986-87.
In 1988, 24,000 more
ployment rate will contin-
and population during
After a slow rebound
people left Texas than
ue to decline as job
1989.
in 1988, the economies
moved in, but the state's
growth outpaces job seek-
The Border region,
of the Metroplex and the
population continued to
ers. Overall, the state's
which grew the fastest
Central Corridor should
grow due to a relatively
unemployment rate will
in 1988, will rival the
gain strength in 1989,
high birth rate. Early in
decline from an average
Gulf Coast in growth
but job growth will be
1989, however, newcom-
of 7.3 percent in 1988 to
during 1989, spurred by
dampened by continuing
ers will outnumber those
6.4 percent in 1989.
twin plant expansions
weakness in construc-
who leave and the state's
in Mexico. The East
tion, banking and real
population will increase
Regional recovery: All
Texas and Plains re-
estate.
by 188,000, or 1.1 per-
six economic regions of
gions also are staging
February 1989, FISCAL NOTES 9
State of Texas
December statement of cash condition¹
(Amounts in millions)
General revenue
Special funds
Total cash
Beginning cash balance December 1, 1988
$542.3
$1,680.4
$2,222.7
Revenue/expenditures
Revenue
961.3
871.2
1,832.5
Expenditures
-527.3
-1,258.0
-1,785.3
Net income (outgo)
434.0
-386.8
47.2
Net interfund transfers and
investment transactions
-471.9
406.7
-65.3
Total transactions
-37.9
19.9
-18.1
Ending cash balance December 31, 1988²
$504.4
$1,700.2
$2,204.6
1 Cash stated is Comptroller's Office Book Cash and may vary from cash deposited with the Treasury. Net amounts shown (less refunds)
exclude some transactions not cleared through the Comptroller's Office. Suspense and Trust Funds are included as are unemployment
compensation trust funds collected by the state but held in the Federal Treasury. Totals may not add due to rounding.
2The ending General Revenue Fund balance includes $998.8 million borrowed from other state funds for cash flow management.
Bob Bullock, Comptroller of Public Accounts.
State revenue¹
Monthly
Year-to-date
All funds
revenue
September 1988 - December 1988
(Amounts in millions)
December
Percent change
1988
Revenue
from last FY4
Tax collections by major tax
Sales tax
$ 464.8
$2,169.3
20.2%
Oil production tax
39.2
138.4
-29.8
Natural gas production tax
54.0
195.6
40.8
Motor fuels taxes (gasoline, diesel, LPG)
146.1
491.9
0.7
Motor vehicle sales tax
76.1
309.4
7.5
Franchise tax
-2.7
-73.0
-322.9
Cigarette and tobacco taxes
37.9
146.8
9.2
Alcoholic beverages taxes
25.7
104.8
0.3
Insurance companies 2 tax
79.4
121.2
57.6
Utility taxes
0.1
46.4
-0.5
Inheritance tax
7.5
40.0
18.2
Telephone tax
0.0
7.6
28.3
Hotel and motel tax
0.7
27.7
120.1
Other taxes 3
3.1
9.3
108.5
Total tax collections
$ 931.9
$3,735.5
10.9%
Revenue by receipt type
Tax collections (detail above)
$ 931.9
$3,735.5
10.9%
Business/professional fees
15.8
53.9
0.9
Noncommercial permits and licenses
81.6
342.1
4.2
Violations, fines and penalties
3.1
26.8
25.8
State service fees
24.6
92.6
5.1
Sales, rental and repayments
of goods and services
9.5
58.1
-4.8
Federal receipts
415.1
1,607.2
8.4
Interest/dividends
200.4
1,016.7
11.0
Land income
23.0
90.3
-14.7
Other receipts
127.5
342.5
49.9
Total revenue
$1,832.5
$7,365.6
10.7%
¹Excludes some revenue not cleared through the Comptroller's Office. Totals may not add due to rounding.
²Includes the Utility, Gas Utility Administration and the Public Utilities Gross Receipts taxes.
³Includes the Ad Valorem, Cement and Sulphur taxes and other occupation and gross receipts taxes not separately identified.
4Due to accounting changes, some percentages are based on different data than reported in the last fiscal year.
Bob Bullock, Comptroller of Public Accounts.
10 February 1989, FISCAL NOTES
State expenditures by object¹
All funds
Monthly
Year-to-date
expenditures
September 1988 - December 1988
(Amounts in millions)
December
Percent change
Objects
1988
Expenditures
from last FY
Salaries and wages
$ 356.9
$1,361.8
8.2%
Other personal services
188.0
703.4
8.9
Consumable supplies and materials
24.5
92.4
-17.0
Current and recurring operating expenses
61.7
240.4
2.7
Assistance and medical care for the needy
229.3
874.7
1.4
Foundation school program grants
453.9
1,936.3
1.9
Other public education grants
78.0
334.6
22.2
Grants to higher education
51.4
222.2
-0.7
Other grants
93.1
305.4
13.1
Payment of principal on indebtedness
12.1
83.7
-42.5
Payment of interest and other claims
39.0
132.0
2.5
Capital outlay for highways
143.6
622.0
1.1
Capital outlay for land and buildings
24.7
93.8
9.6
Other capital outlay
29.2
189.8
-9.8
Total expenditures
$1,785.3
$7,192.5
3.3%
¹Excludes some expenditures not cleared through the Comptroller's Office. Totals may not add due to rounding.
Bob Bullock, Comptroller of Public Accounts.
State expenditures by function¹
All funds
Monthly
Year-to-date
(Amounts in millions)
expenditures
September 1988 - December 1988
December
Percent change
Category
1988
Expenditures
from last FY2
Administrative
Executive departments
$ 41.1
$ 177.3
-1.4 %
Business regulatory commissions
15.6
62.0
27.7
Legislative
4.1
17.9
0.6
Judicial
4.2
17.2
3.5
Total
$ 65.1
$ 274.4
4.4 %
Services
Welfare
$ 275.5
$1,055.6
2.8 %
Mental health, state homes
and corrections
111.8
436.6
18.0
Health and sanitation
31.0
107.6
9.5
Law enforcement
14.1
59.1
3.1
Total
$ 432.5
$1,658.9
6.9%
Improvements
Highway maintenance and construction
$ 216.0
$ 905.4
-0.8 %
Natural resources
13.7
56.9
5.6
Parks and monuments
9.8
45.2
5.5
Total
$ 239.5
$1,007.6
-0.2 %
Education
Support to state and local education
$ 770.7
$3,236.4
3.0%
State contribution to teacher retirement
65.8
277.5
2.0
Total
$ 836.5
$3,513.9
3.0 %
Other Expenditures
Grants to political subdivisions and others
$ 93.1
$ 305.4
13.1 %
Payment of public debt
51.1
215.6
-21.2
Social security contribution
38.8
136.7
10.8
State contribution to employee retirement
26.7
69.9
39.3
Miscellaneous
2.1
10.2
-10.4
Total
$ 211.8
$ 737.8
1.3%
Total expenditures
$1,785.3
$7,192.5
3.3%
¹Excludes some expenditures not cleared through the Comptroller's Office. Totals may not add due to rounding.
2Due to accounting changes, some percentages are based on different data than reported in the last fiscal year.
Bob Bullock, Comptroller of Public Accounts.
February 1989, FISCAL NOTES 11
Business outlook improves for 1989
Texas' business leaders are general-
try leaders were mixed in the latest
Texas
ly optimistic about the state's econom-
survey. Mining and manufacturing
ic outlook for the first half of 1989, and
optimism increased, while the out-
these expectations at the end of 1988
look for construction, utility, whole-
Glance
led to a modest increase in the latest
sale and retail trade declined.
Manufacturing:
Index of Future Business Conditions.
But even though outlook varied
Rose 1.3 points
The 1988 fourth-quarter index, calcu-
among industries, fully 96 percent
to 56.3
lated from results of the Comptroller's
of all executives
Quarterly Survey of Business Expec-
who responded to
tations conducted in December, was
the survey expect
58.6, an increase of 0.1 from 1988's
that overall busi-
Mining:
Utilities:
third quarter and one full point higher
ness conditions will
than 1988's first quarter.
be the same or bet-
Based on a very
Dipped 0.4
Despite some fluctuations in 1988,
ter in six months.
small response,
points to 55.9
the index continued its overall upward
rose 12.3 points
to 65.6
trend above 50, the neutral point,
since the end of 1986.
As usual, expectations among indus-
Retail trade:
Wholesale:
Construction:
Slipped 0.2
Fell 1.4 points
Dropped 1.7
points to 60.4
to 56.7
points to 58.9
Highs and lows of the Index
of Future Business Conditions
1/
'84/1
65.2
'88/2
(Editor's Note:
59.8
'88/4
The 1988 Fourth-Quarter
58.6
Survey, conducted by the
Comptroller's Economic Analysis Cen-
ter, polled companies representing a
cross-section of the state's businesses. Some
are Texas-based while others do business in Texas
but are headquartered elsewhere.
Additional information about the survey and results
may be obtained from the Economic Analysis Center at
P.O. Box 13528, Capitol Station, Austin, Texas 78711
'86/1
or (512) 463-4900.)
42.8
Source: Bob Bullock, Comptroller of Public Accounts.
FISCALNOTES
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Economic Analysis Center
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ACCOUNTS
For additional copies write:
Bob Bullock, State Comptroller
Economic Analysis center
P.O. Box 13528, Capitol Station
Austin, TX 78711
Material in Fiscal Notes is not
copywrited and may be repro-
duced. The Comptroller of Pub-
lic Accounts would appreciate
credit for the material used and a
copy of the reprint.
12 February 1989, FISCAL NOTES