Texas is experiencing a mix of economic growth and challenges as the state legislature tackles key issues. A new Realtor.com report projects that Texas will overtake California as the most populous state by 2045, but housing affordability remains a major concern, with 90% of Texans calling it a problem[1].
In government and politics, the Texas Legislature is in session, focusing on conservative priorities such as education savings accounts, a voucher-like policy that would give families direct access to state funds for private school tuition and other education-related expenses[2]. The session follows an election cycle that saw Republicans maintain firm control of both legislative chambers, but the party is deeply fractured, with a leadership battle looming for control of the Texas House.
Economically, Texas businesses reported rising service sector revenue and a resumption of production growth in the manufacturing sector after weakness in 2023 and much of 2024, according to the Dallas Fed’s Texas Business Outlook Surveys[3]. However, job growth slowed at the end of 2024, with an annualized three-month moving average of 1.4% in December, below Texas’ long-run average job growth rate of about 2.0%.
In environmental news, the 2025 spring outlook indicates a warmer and drier pattern for areas of Texas, with above-average temperatures across much of the South and a 50 to 60% chance that temperatures will be warmer than usual across much of the state, particularly in southern Texas and along the Gulf Coast[4]. However, the precipitation outlook isn’t as promising, with much of Texas expected to experience drier-than-usual conditions, which could exacerbate the ongoing drought.
Looking Ahead:
- The Texas Legislature will continue to address key challenges, including shoring up the state’s water supply and power grid, addressing health care and public school workforce shortages, and continuing to rein in property taxes around the state.
- The impact of warmer temperatures and drier conditions on Texas' agriculture and water resources will be closely monitored.
- The ongoing legal and environmental concerns surrounding SpaceX's operations at Boca Chica Beach will remain a developing story.
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