Texas Earns Cs for Manufacturing, Tax Climate

This year’s Manufacturing and Logistics Report Card gives Texas a C for manufacturing. That’s mainly because other sectors in the state, notably oil and gas extraction, are growing at a faster clip. Houston is now the leading manufacturing city in the country, but the sector as a whole represents only about 7% of the state’s economy.

The state also earned a C for tax climate. Michael Hicks teaches economics at Ball State University, which publishes the report card.

“And the reason is not so much that business taxes alone aren’t problematic, it is that businesses pay an awful lot of personal taxes, and so with respect primarily to sales and property taxes, the Tax Foundation, which provided much of the comparable data here, put you right in the middle of the pack of the nation.”

Texas did far better on logistics, earning an A largely on the strength of petroleum flowing through the Port of Houston. But it managed only a D on human capital, reflecting the state’s weak educational standings in math and science.

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