Texas 2036 Report
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Influences Shaping the Future of Texas

After substantial research and analysis, Texas 2036 has developed a broad focus on the most important factors that continue to shape Texas today and the trends that will influence its future. As proud as Texans are, we are all aware after the coronavirus pandemic that the world is interconnected and Texas is subject to broader forces beyond its control. The Strategic Framework can inform policy discussions and solutions, keeping in mind these powerful drivers of change:

Geography and a Changing Global Economy. Texans have a strong shared identity across dramatically different regions. In water supply and agriculture, or in health care and education, needs are very different in East Texas and West Texas, or in the Panhandle and the Valley. These very different regions all need access to world markets, but it is harder for “one size fits all” solutions to work in Texas, given the tremendous variety among the places Texans live and work.

  • Urban and Rural. About 90% of Texans live in urban areas today and that trend will continue through 2036.
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    Texas Demographic Center, Texas Population Projections Program. Population Projections for the State of Texas in 1-year increments, 2036 value. https://demographics.texas.gov/data/TPEPP/Projections/Index.

    At the same time, Texas’s rural counties provide invaluable energy, water supplies, agriculture production, and exports to fuel our state economy. Our interdependency will shape state policies and programs to reflect and respond to these unique needs.
  • A Vibrant and Vital Border. The Texas/Mexico border is an extraordinary asset as well as a challenge, but there is no question that it is key to Texas’s economic growth and export success. The coordination of state and national policies on border issues — trade, transport, energy, immigration, water, and environment — is critical and will continue to require Texas’s leadership.
  • A Long and Valuable Coastline. Texas is a global maritime powerhouse. Refineries, fishing, shipping, cruises, and tourism are driven by Texas’s central location on the Gulf of Mexico. From the Sabine River at Texas’s border with Louisiana to the Rio Grande at the Mexican border, Texas’s coastal counties (including Harris County) accounted for 33.4% of total Texas real gross product in 2014.
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    The Perryman Group, The Economic Importance of Texas Coastal Counties: An Analysis of the Dependence of Texas and its Regions on Business Operations in the Tier 1 Windstorm Insurance Coverage Area, January 2015. https://www.perrymangroup.com/publications/report/the.economic-importance-of-texas-coastal-counties/

  • An Interconnected Economy. Trade agreements and technology have made it far more efficient for businesses to cross borders and coordinate international supply chains. Thanks in large part to free trade agreements and abundant, low-cost energy, Texas has become the nation’s export powerhouse and one of the most globalized states in the nation.
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    Bernard L. Weinstein, How Texas became the heart of NAFTA and now has the most at stake, TribTalk, April 27, 2018. https://www.tribtalk.org/2018/04/27/how-texas-became-the-heart-of-nafta-and-now-has-the.most-at-stake/.

    "In recent years, exports have accounted for 17.8% of the state's GDP and supported an estimated 910,000 jobs.[00-04] Texas depends on world markets, with 35% ($109.7 billion) of the state’s total goods exports going to Mexico in 2018 — Canada and China are our next-biggest trading partners.
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    Ibid.

    But uncertainty and changes in trade policies could have a disproportionate negative effect on Texas.
Demographics. Population growth helps drive economic growth. By this measure, Texas is successful. It is the second most-populous state in the country
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U.S Census Bureau, National and State Population Estimates, 2019. https://www.census.gov/data/tables/time-series/demo/popest/2010s-state.total.html.

and has five of the 15 fastest-growing cities in the nation.
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San Antonio (#4), Fort Worth (#3), Austin (#6), Frisco (#10), McKinney (#13). U.S. Census Bureau, Fastest-Growing Cities Primarily in the South and West, May 2019, Table 2, The 15 Cities With the Largest Numeric Increase Between July 1, 2017 and July 1, 2018. https://www.census.gov/newsroom/press-releases/2019/subcounty-population-estimates.html

By 2036, Texas is expected to add nearly 10 million people, increasing our state population to 38 million.
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Texas Demographic Center, Texas Population Projections Program. Population Projections for the State of Texas in 1-year increments, 2036 value. https://demographics.texas.gov/data/TPEPP/Projections/Index.

Shifts within the Texas population will have major impacts on state government services such as education and infrastructure.
  • Population diversity. Recent projections indicate that Texas’s Hispanic and African American populations will both increase more than 40% by 2036, and the state’s Asian population will be its fastest growing, more than doubling in size.
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    Based on percentage change from 2018 to 2036. Texas Demographic Center, Texas Population Projections Program. Population Projections for the State of Texas in 1-year increments, 2036 value. https://demographics.texas.gov/data/TPEPP/Projections/Index.

    The Anglo population is projected to steadily increase, although at a slower rate than other groups.
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    White population projected to increase by approximately 9% between 2018 and 2036. Texas Demographic Center, Texas Population Projections Program. Population Projections for the State of Texas in 1-year increments, 2036 value. https://demographics.texas.gov/data/TPEPP/Projections/Index.

    This increasingly diverse population will bring new skills, ideas and perspectives, helping the state retain talent, promote competitiveness and increase economic growth.
  • Poverty. Economic growth has not equally benefited all Texans. Even though the overall poverty rate in Texas has largely held steady, the share of Texas students deemed low-income in our school system (i.e. qualifying for free and reduced-price lunch) has increased from 35% in 1988 to 61% today.
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    Free and reduced-price lunch thresholds equal 185% of the federal poverty line. Texas Education Agency Policy Planning and Research Division, Enrollment Trends in Texas Public Schools, 1998. https://tea.texas.gov/sites/default/files/Spec_PRR_11_1998.pdf. Texas Education Agency, Texas Academic Performance Report, 2018-19 State Student Information. https://tea.texas.gov/student-testing-and-accountability/accountability/state-accountability/performance-reporting/texas-0.

  • Aging population. By 2036, the population of Texans 65 years of age and older is projected to grow by 78%, while the overall population will grow by less than half that (33%).
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    Based on percentage change from 2018 to 2036. Texas Demographic Center, Texas Population Projections Program. Population Projections for the State of Texas in 1-year increments, 2036 value. https://demographics.texas.gov/data/TPEPP/Projections/Index.

    Since older Texans use more health care than younger Texans, an increasing over-65 population will create pressures on the state budget and on Texas families.
  • Slowing migration. Domestic and international migration into Texas provides an important boost for the state's economy — nearly half of the state’s workers are non-native Texans.
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    Federal Reserve Bank of Dallas, Southwest Economy, Q1 2018, Gone to Texas: Migration Vital to Growth in Lone Star State. https://www.dallasfed.org/~/media/documents/research/swe/2018/swe1801b.pdf.

    And the higher educational attainment rates of these Texas transplants have created a better-educated workforce.
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    Ibid.

    Texas has especially benefited from international migration to fill high-skill jobs in fields such as science, technology, and health care. However, migration of all kinds is beginning to slow, making it increasingly important to prepare Texas students to meet our workforce needs.

Separation of Powers. Under our nation’s federal system, states have significant authority to impact the 36 goals outlined in this framework, but state governments do not operate in a vacuum. Federal laws and regulations often limit state efforts and can restrict innovation by the states. Changing federal regulations may also limit Texas’s ability to help the nation achieve and sustain energy independence.

And while this framework focuses primarily on state-level goals, much of the day-to-day government activity impacting Texans occurs in local communities, spearheaded by city and county officials, as well as local school boards. Aligning all levels of government to address these goals will ensure that Texas is best able to tackle the problems it faces today and will face in its third century.

Adaptability and Resilience. Texas cherishes tradition but has excelled at change throughout its history. With a modest economic start in cotton and cattle, the Texas economy has vaulted into leadership in fields such as medical research, telecommunications, energy production, and space exploration, among many others. Each of these key industries is facing competitive pressures to adapt and change, and so must Texas.

Making sure our infrastructure, business climate, and workforce skills are ready for unprecedented types of change is well within our state’s ability, with the right focus and preparation.

  • Climate. More frequent extreme weather events will pose a threat to Texans’ safety and affect the state’s water supply, production of food and fiber, resiliency of infrastructure, and more — all of which have an impact on the state’s budget. While Texas weather has always had wild day-to-day extremes, potential long-term changes to the state’s climate increase the risk and intensity of weather events exponentially. In the past decade, Texas has experienced everything from its worst one-year drought on record (2011)
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    The Texas Tribune, State Climatalogist: Drought Officially Worst on Record, August 2011. https://www.texastribune.org/2011/08/04/state.climatologist-drought-officially-worst-recor/.

    to its wettest year (2015)
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    Texas A&M Agrilife Research, Monthly Rainfall (1968-2020). https://etweather.tamu.edu/rainhistory/.

    to the greatest single-storm rainfall in the nation’s history (2017).
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    The Washington Post, 60 Inches of Rain Fell From Hurricane Harvey in Texas, Shattering U.S. Storm Record, September 2017. https://www.washingtonpost.com/news/capital-weather-gang/wp/2017/08/29/harvey.marks-the-most-extreme-rain-event-in-u-s-history/.

    Texas also has more billion-dollar weather disasters than any other state.
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    National Oceanic and Atmospheric Administration, Billion-Dollar Weather and Climate Disasters. https://www.ncdc.noaa.gov/billions/mapping.

  • Technology. Advancements in technology — from big data and advanced analytics to artificial intelligence to robotics — have the potential to stimulate economic growth and greatly improve Texans’ quality of life. However, these advancements also have the potential to disrupt industry and transform the labor market, meaning government needs to adapt at the speed of technological change.
  • Job displacement. Our economic health may hinge on how quickly Texas can adapt to the automation age, as technological advancements increasingly automate routine, low-skilled jobs. The state is projected to have 19% job growth by 2030, the most of any state and more than double the national average.
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    McKinsey Global Institute, The Future of Work in America, July 2019, and Texas (Dallas and Houston) Fact Pack. https://www.mckinsey.com/featured-insights/future-of-work/americas-future-of-work.

    But Texas could also experience a 23% job displacement rate, which translates into 3.6 million job displacements.
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    Ibid.

    More than one-in-four displacements are likely to affect workers with less than a bachelor’s degree.
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    Ibid.

  • Connected living. Texans are increasingly integrating technology and connectivity into their daily lives, affecting everything from shopping and entertainment to health and wellness to education and work. This can especially benefit rural areas, where digital technologies can improve access through online Learning, telemedicine, remote work, and more. However, this also brings challenges, including an increased need for digital literacy skills and access to high-speed internet — particularly in rural areas. And it will be important for policymakers to keep pace with the regulatory, privacy, and other concerns in an area primarily driven by the private sector.
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    Institute for the Future, Future of Connected Living, 2019. http://www.iftf.org/fileadmin/user_upload/downloads/ourwork/