As the nation appears to slowly be dragging its way out of a two-year financial funk, local business and political leaders are maintaining that while things are bad elsewhere, Texas and, specifically Harris County, have proven to be a port in the economic storm.

A recent report published by Harris County Management Services details the economic status and does, in fact, back up those claims to some degree.

The 10-page report was created to help the county plan for the 2010-11 fiscal year, a time when many economists are expecting financial charts to inch back up out of the red and into the black.

However, the report initially states that “while there are some signs of improvement, it does not appear that the economy has reached the bottom of this current cycle and there are a number of ongoing concerns…”

Chiefly among those signs are “historically high federal deficits,” which was more than three times higher in 2009 than the previous record in 2003.

County governments rely primarily on property taxes to fund expenditures, but also collect significant sums from federal and state government. Industry bailouts and stimulus programs have been created to help offset the economic downturn, but the increasing deficit is resulting in lost money for state counties in some cases.

Harris County Chief Investment Officer Edwin Harrison explained that the county has instituted a hiring and salary freeze and has “slowed the pace of our building programs,” which include such projects as libraries, technological needs and roads.

“We can only spend what we have,” Harrison said.

A significant portion of the county’s budget, he explained, is dedicated to the Harris County Sheriff’s Office, where planners may look to “slow the growth of expenditures.”

Harrison pointed out that did not mean laying off officers or instituting a hiring freeze; in fact, the opposite.

“For example, we pay a lot of overtime because we don’t have enough officers,” he said. “So we could hire more officers, cut overtime and save money. So we’re actually growing the number of officers while cutting expenses.”

However, trends in residential real estate and appraisal data show that help may be on the way.

According to the County report, “the housing market was trending upward in December 2009 with new residential construction up 11 percent compare to one year earlier.”

In addition, Harrison explained that the Harris County Appraisal District has indicated that while the valued of assessed property could be down as much as 5 percent this year, 2011 could see values level off or increase slightly.

“It’s going to take a couple of years to get back to where we were,” he added.

One factor in Harris County’s favor is a foreclosure rate much lower than that of “rapid growth areas” such as California, Nevada, Arizona and Florida.

The report states that foreclosure rates in those states range from 4.8 percent to 10 percent of all homes, while the Harris County rate was less than 1 percent in 2009.

Another indicator that paints a somewhat rosier picture for this area is the unemployment rate. At the onset of 2008, the national unemployment rate was approximately 5 percent, with Texas and the greater Houston area closer to 4.5 percent.

Since the economy began spiral downward, all three rates have increased, but not quite as dramatic locally. By the end of 2009, the national unemployment rate had doubled to nearly 10 percent, while Texas and Houston’s rate rose to almost 8 percent.

A broader picture of the job market in Texas shows, according to the report that “total U.S. employment has grown by 374,000 jobs (.3 percent), while the State of Texas has grown by 1.26 million jobs, and the Greater Houston area has grown by 289,000 jobs.”

The report concludes by stating that economic conditions locally and nationally likely will not improve significantly until consumer confidence can be restored and job growth re-established and recommended “cautious spending for county operations and capital projects.”

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