When Petrostates dry up

The facts: For many years, economic growth in Texas has consistently outpaced growth in the rest of America. But that long run ended in 2015, with employment growth in Texas dropping well below the national average and a fall in leading indicators pointing to a further slowdown ahead. In most states, this slowdown would be no big deal; occasional underperformance is just a fact of life. But everything is bigger in Texas, including inflated expectations, so the slowdown has come as something of a shock.

Now, there’s no mystery about what is happening: It’s all about the hydrocarbons. Texans like to point out that their state’s economy is a lot more diversified than it was in J.R. Ewing’s day, and they’re right. But Texas still has a disproportionate share of the U.S. oil and gas industry, and it benefited far more than most other states from the fracking boom. By my estimates, about half the energy-related jobs created by that boom since it began in the middle of the last decade were in Texas, and this extractive-sector windfall accounted for about a third of the difference between growth in Texas and growth in the rest of the country.

What about the other two-thirds? Like the rest of the Sunbelt, Texas is still benefiting from the long southward shift of America’s population that began with the coming of widespread air-conditioning; average January temperature remains a powerful predictor of regional growth. Texas also attracts new residents with its permissive land-use policies, which have kept housing cheap.

Now one of the three big drivers of Texas growth has gone into reverse, as low world oil prices are bringing the fracking boom to a screeching halt. Hey, things like that happen to every state now and then.

But Texas wasn’t supposed to be like other states. It was supposed to be the shining exemplar of the economic payoff to reverse Robin-Hood economics. So its recent disappointments hit the right-wing cause hard — especially coming on the heels of the Kansas debacle.

For those who haven’t been following the Kansas story, in 2012, Sam Brownback, the state’s hard-right governor, pushed through large tax cuts that would, he promised, lead to rapid economic growth with little, if any, loss of revenue. But the promised boom never materialized, while big budget deficits did.

And, meanwhile, there’s California, long mocked by the right as an economy doomed by its liberal politics. Not so much, it turns out: The budget is back in surplus in part because the emergence of a Democratic supermajority finally made it possible to enact tax increases, and the state is experiencing a solid recovery.

The states, Louis Brandeis famously declared, are the laboratories of democracy. In fact, Mr. Brownback himself described his plan as an “experiment” that would demonstrate the truth of his economic doctrine. What it actually did, however, was demonstrate the opposite — and much the same message is coming from other laboratories, from the stumble in Texas to the comeback in California.

If Alaska takes the unprecedented step of partially shutting down state government in July, many of the 10,000 employees who would lose their jobs could also get a cash windfall -- whether they want it or not.

For years, state employees were able to save up annual or personal leave that they didn't use, and some have amassed substantial amounts, state personnel officials say. In the event an employee is laid off, for whatever reason, they have to receive the value of that leave as a cash payout.

"There's a fair amount of accrued leave built up over the years," said Sheldon Fisher, commissioner of the Department of Administration, which oversees state payroll and union contracts.

The state calculates the value of leave held by employees to be worth $175 million, and those who are laid off will be paid the value they've each earned.

But that's not all state employees. There are about 16,000 workers in the executive branch facing possible layoffs, but only about 10,000 have received notices of possible layoffs because funding is available for some government functions. Certain departments key to the safety of the public, such as Corrections and Public Safety, are fully funded, meaning that prison guards and troopers would stay on the job, as would a selection of others.

The state's largest department, Health and Social Services, is partially funded and won't face immediate layoffs. The Legislature and Alaska Court System won't be affected at all.

That makes it difficult to get a precise estimate of the immediate cost to the state of a shutdown.

Some employees have "bumping rights," meaning that if their job is slated for layoff, their seniority may allow them to move into a remaining job.

"It's virtually impossible at this stage to know who is going to be laid off, " Fisher said.

He estimated the immediate cost to the state as being in the tens of millions of dollars.