Conservative fiscal management makes Texas's credit a very safe bet, according to a recent analyst's report from Dean Witter Reynolds Inc.

Noting that Texas is "unique" because the national recession is largely bypassing the state, the report said a demonstrated capacity to broaden its revenue base -- diversifying away from gas and oil severance taxes -- is revealing the Texas economy's "resiliency."

While other states are mired in recession, Texas is squeezing savings from school district consolidation and new revenues from a hefty gasoline tax increase, according to Mark Tenenhaus, author of the report.

The only real shadows cast over the Lone Star state are a jump in unemployment, to 7.9% in October from 6.6% in September, and a $1.1 billion prison construction program that is being financed by bonding.

Workers have been laid off from the manufacturing and aerospace sectors, Mr. Tenenhaus observed, and the prison funding is a "sharp deviation from past policies, which funded many capital projects on a pay-as-you-go basis."

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