DALLAS - State Comptroller Glenn Hegar predicts more oil companies will go bankrupt, resulting in additional job losses. But he predicted Texas may have recently bottomed out from the effects of continuing low oil prices.
“February seems to have been the bottom of the mark,” Hegar said during an appearance on WFAA's Inside Texas Politics Sunday morning. “Obviously we are watching. We hope the curve has been made and we’re starting to climb back out of it, but you’re still – at these low prices, even at the high $30s – you’re still going to see bankruptcies in the oil and gas industry from the balance sheets they have.”
Hegar stressed the situation in Texas is much more encouraging than some oil-producing neighboring states.
The dropping price of oil hit Oklahoma hard, forcing that state to cut back some state services and lay off workers.
“Our economy is much more diverse than they are, so we have absorbed the impact of lower oil prices," Hegar said. "We’re still going to see more job losses, unfortunately, at these lower prices, and you’ll see some bankruptcies of companies... so there’s still pain to be felt in Texas. But our economy is so much more diverse that we’re able to absorb that impact much more than those states."
Still, the oil price glut means Texas lawmakers have $3 billion less to spend when they return to Austin in January.
“I’ve been telling the legislature that if you look at the state economy, we have some head winds and we also have some tail winds, and the fact is right now our collections into the treasury are really tracking right along with the numbers we forecasted in October of last year,” the comptroller said.
Hegar predicts modest growth in Texas compared to the last couple of years until oil prices rebound.
“Yes, we haven’t had the significant percentage point job gains as some other states but … comparing ourselves to other oil-producing states... we’re much higher than them," he said. "You still have on average another 650 people move to Texas every day, natural growth of another 600 on top of that. You’ve seen only one month of negative employment in Texas where we’ve lost jobs overall as a state: March of last year. Every single month since then we’ve continued to gain jobs."