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Pandemic Drives Texas Unemployment

Fiscal Notes: Pandemic Drives Record Unemployment

The Coronavirus pandemic forced businesses across Texas and the nation to curtail or cease operations, throwing millions out of work and prompting a record increase in unemployment claims that are straining the safety net for workers. Nearly two million people in Texas filed for unemployment insurance benefits from March 14 through May 9, triple the number of claims filed in all of 2019.

In this issue of Fiscal Notes, we take an early look at the economic pressures now gripping the state. We also examine the first impacts on employment and several other measures that can shed some light on current conditions.

“It’s far too early to say how long these conditions will last — and how deep the trough will go,” Texas Comptroller Glenn Hegar said. “Many economic measures are only beginning to reflect the crisis. It will be months before we can chart its full dimensions. Fortunately, our state’s fiscal position is strong enough to support vital programs for the remainder of this year, and our state’s “Rainy Day Fund” remains healthy. But the legislative session that begins in January 2021 will face significant and perhaps unprecedented challenges.”

Getting Texans back to work will no doubt be one of the more significant challenges. A record 315,167 Texans filed initial jobless claims during the week ending April 4; a comparable week in 2019 saw about 13,000 applications. The spiraling unemployment rate has forced the Texas Workforce Commission to ramp up its web-based and telephone systems, boost staffing, and extend operating hours to ensure claimants get the benefits due to them.

The May issue of Fiscal Notes also considers the history of previous recessions and their effect on tax revenues. The current situation is unprecedented in the speed with which it took effect, but the past does provide some important clues for our future.

For questions about how our tax functions are continuing during the outbreak, visit our COVID-19 News page or our Virtual Field OfficeFiscal Notes is available online and by subscribing via the Comptroller’s website.

Fiscal Notes furthers the Comptroller’s constitutional responsibility to monitor the state’s economy and estimate state government revenues. Published since 1975, it features in-depth analysis concerning state finances and original research by subject-matter experts in the Comptroller’s office.