Texas' economic strengths do not insulate it from the U.S. downturn but should provide a buffer stout enough to keep the state from following the nation into any recession, top officials and experts say.

Although the Lone Star State's economy is slowing, it is growing. Sales tax revenues are rising, and the state outperforms the nation as a whole on jobs.

"We do not believe there will be a recession in Texas. That's pretty much unequivocal," said state Comptroller Susan Combs, who added that Texas lags six to nine months behind national trends.

The state benefits, experts say, from economic factors that have outweighed gas pump sticker shock. Other factors in Texas' favor include rising commodity prices, growing defense spending, a weak dollar benefiting exports and a reputation for a business-friendly environment.

Economist Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas in Denton, said the nation is in recession but agreed Texas will not share in it, barring catastrophe on the order of "a global financial meltdown."

"We will definitely see a slowing of economic activity in Texas — fewer jobs being created, consumer spending will grow a lot more slowly this year than last year — but we're not going to have an actual contraction of the state's economy."

Others are more cautious but say the state is in relatively good shape.

Whether Texas goes into recession depends on "the severity of the national recession, should we have one," said Dale Craymer, chief economist of the Texas Taxpayers and Research Association.

"If U.S. economic growth drops to negative 1 percent, we probably avoid a recession here. If U.S. growth drops by 5 percent, we probably would be dragged down by it.

"If the nation gets the flu, we're going to get a bad cold," he said. "If the nation gets a cold, we'll get the sniffles."

Dick Lavine, senior fiscal analyst of the Center for Public Policy Priorities, which advocates for programs for lower-income Texans, said it was too early to trumpet Texas' success.

Weathering the crisis

"If we have a deep, national recession, it will undoubtedly affect Texas," he said. "What's happening on Wall Street and with the mortgage crisis and credit crunch is not over yet."

When it comes to state government, lawmakers said conservative revenue estimates and unspent billions in the current two-year budget period should shield it from service cuts now and provide a head start in writing the next budget.

"We right now are in good shape" said Sen. Steve Ogden, R-Bryan, Senate Finance Committee chairman. "The two variables we don't know about right now are how well will the state business tax work, and is the federal government going to have to reduce spending in order to strengthen the dollar."

The latter represents a concern shared by Rep. Warren Chisum, House Appropriations Committee chairman. Texas already is grappling with less-than-expected federal transportation funding.

"That (the possibility of federal cutbacks) is our biggest concern," said Chisum, R-Pampa.

Among other points of weakness, Texas' housing market has its difficulties, including a higher rate of residential mortgage delinquencies than the national average.

Gov. Rick Perry on Thursday voiced concern about the effect higher energy, transportation and grain costs have on cattle, pork and chicken producers.

The right decisions

But those concerns are more than balanced by the positives, he said. Perry sees the roots of Texas' favorable position in a decision state leaders made in 2003 to bridge a $10 billion budget shortfall without new taxes, saying states that raised taxes or issued debt without cutbacks are paying the price.

"Leadership made some hard decisions — difficult decisions, painful decisions — but they were the right decisions," Perry said. But Craymer cautioned that predictions are chancy.

"As an old revenue estimator, the worst time you ever wanted to say anything about the future is when you are sliding on a downhill slope. You don't know where the bottom is. You don't know how deep it's going to be."