DALLAS -- Property values in major Texas counties have begun to rebound or stabilize in the past year for the first time since the mid-1980s when the oil crisis devastated the state's economy, Standard & Poor's Corp. said this week.

In the Monday issue of CreditWeek Municipal, the rating agency also said it expects the modest tax base increases will continue because the state is experiencing economic growth and diversification, more construction, and the use of previously vacant and bankrupt properties.

The increases take some of the pressure off local governments that could have faced rating downgrades if property valuation continued to decline. Instead, the property value increases could have a positive effect on some selected ratings in oil-dependent and other regions, said Peter D'Erchia, a Standard & Poor's managing director.

The oil patch counties, such as Harris, were particularly hard hit by problems following the 1986 energy bust that helped bring down the state's real estate and banking industries. Harris County, home of Houston, which is considered the U.S. energy capital, experienced a 7.5% decline in assessed value during fiscal 1988, the rating agency said. Property values started to pick up by fiscal 1991.

Other Texas counties that are not as directly tied to the energy industry lagged Harris. Counties such as Tarrant, Dallas, Bexar, and Travis that are the home to Fort Worth, Dallas, San Antonio, and Austin, respectively, did not experience major tax declines until one to three years after Harris.

Those counties are only now beginning to see growth in assessed valuation, Standard & Poor's said. Overall, the taxable assessed value in 1994 for the five counties is $283.5 million, up from.S279.5 million in 1993, and the first increase since the mid- 1980s, the rating agency said. The higher property valuations are a lagging indicator of the state's improved economy where future signs are positive, it said.

Diversification is helping fuel growth in other industries such as high technology, and the oil and gas sector accounts for only about 12.5% of the state's economy, down from 25% in 1981. During the next three years, Texas is expected to lead the nation in employment growth as jobs are created in computer and high technology sectors, manufacturing, and construction. The state is predicted to be second in the nation in private housing starts.

In addition, "southern Texas counties will see some benefits from the North American Free Trade Agreement as they diversify into the wholesale and retail trade sectors and services," D'Erchia said.

Economic diversification already is paying off elsewhere in the state. Texas led the nation in high-tech employment growth in 1993 with an increase of 3.1%, compared with a decline in the United States as a whole during the same time period, Standard & Poor's said in a related article in this week's CreditWeek. Much of the high-tech growth was in the Austin area, which has become known as Silicon Hills as computer and electronics firms move from California and other states to expand or start operations in Texas.

Austin is now home to 750 high-tech firms with a total employment of about 80,000, and that is expected to grow as firms such as Motorola and Advance Micro Devices each finish constructing $1 billion micro-chip manufacturing plants, Standard & Poor's said. Other high-tech leaders in Austin are Lotus Development Corp. and Apple Computer.

Overall, Austin led the state in the creation of manufacturing jobs for the second consecutive year in 1993, and its unemployment rate has fallen from 5% in February 1993 to 4.2% in 1994, the rating agency said. DRI/McGraw Hill projects unemployment will fall to 3.7% in the second quarter of 1995. While the state and local government continues to be the leading employer in Austin and high technology will continue to dominate manufacturing jobs in the city, the service sector also is expected to grow in the future.

As a result of the improving economy, Standard & Poor's said it recently upgraded bond ratings in Austin suburbs, which have become bedroom communities for employees at high-tech and other firms. The Dallas region also has seen employment growth in the high-tech industry as well as distribution and retail, the rating agency said.

The so-called Telecom Corridor in the north Dallas suburbs has created many high-tech jobs at some 355 telecommunications and other companies. The largest employer, Northern Telecom, and its affiliate, BNR, employ more than 4,300 people in the Dallas area, Standard & Poor's said.

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