West Texas Booming, But Old-Timers Still Remember How Oil Booms End

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“Don’t go overboard. It’s not going to last,” Midland Mayor Wes Perry wants to shout, as a reminder to his own neighbors and a warning to communities in Pennsylvania and elsewhere that have never boomed like this, let alone endured a bust on par with the one Texas experienced a generation ago.

For now, Midland is the picture of prosperity. Since 2008, sales tax revenue has shot up from $24 million a year to more than $38 million in 2013. The unemployment rate is the lowest in Texas, hovering just above 3 percent. The town has hundreds of unfilled jobs. A local Subway pays $15 an hour with a $1,000 starting bonus. Housing is so scarce that modest hotel rooms go for $300 a night.

This, longtime residents know, is what an oil boom looks like. And it’s always been followed by a steep, painful decline. When the energy market finally fades, the town wants to avoid being burdened with crushing debt or too many employees. So sales tax revenue is used only for one-time projects, such as street repairs. Police officers are hired piecemeal, two or three a year, as the population increases.

Instead of using municipal money to lure an investor to build a proposed high-rise project, the city will instead provide an 80 percent tax break on revenues for five years. “Companies don’t screw up in bad times. They screw up in good times. Same for cities,” Perry said.

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http://www.stltoday.com/news/national/booming-oil-towns-prepare-for-inevitable-bust/article_52a93aac-5045-5db1-81e1-66a04d2548c8.html