Senate Committee Talks Aerospace Taxation, 'Unfit' Military Recruits | Texas Public Radio

Senate Committee Talks Aerospace Taxation, 'Unfit' Military Recruits

Feb 7, 2018

The Senate Committee on Veterans Affairs and Border Security convened at Port San Antonio Wednesday to hear public comment on issues ranging from defense manufacturing to military youth readiness.

The hearing began with a call for testimony about ways to promote the strategic importance of military installations in Texas. Representatives from aerospace engineering and maintenance firms like Boeing, Lockheed Martin, and StandardAero shared concerns about taxation and the state’s available workforce.

Tony Bennett of the Texas Association of Manufacturers testified that current tax law hinders companies with federal defense contracts.

“Our state's tax treatment of this sector is a significant disadvantage,” he said. “Defense companies are facing competitive burdens — both domestically and internationally — to produce and service products that maintain our nation's safety and security at the most cost effective means possible.”

Bennett added that federal defense contractors face a unique challenge. The Defense Department requires them to provide ongoing support for the products they make. Under the current franchise tax law, Bennett said companies can only deduct a portion of their costs associated with federal contracts.

Bennett said, as a result, Texas had fallen in the PriceWaterhouseCoopers annual rating of the top ten states for aerospace manufacturing attractiveness. In 2015, Texas ranked No. 2 on that list as a competitive environment for aerospace operations. Last year, the state dropped down to No. 8.

“Texas scored poorly in three keys areas: skilled workforce, taxation and labor costs,” Bennett said.

Tyler Schroeder, manager of Government Operations with Boeing, echoed those points, and argued that schools in Texas would need to target certain skill sets to better prepare students for jobs in the aerospace sector.

“You really focus on one key: (science, technology, engineering and math) education. Manufacturing has gotten a poor image over the last few years. It seems antiquated to people. It’s very labor intensive, turning wrenches and things like that,” Schroeder said. “But the ability to do that job on today’s products — with the computer skills that you have to have to be able to read the drawings, to be able to interpret what the engineers are putting and apply that to a product — is STEM related.”

Senators Donna Campbell and Jose Rodriguez then pressed representatives from several firms about whether they are facilitating corporate grants and partnerships with education systems around the state.

The committee’s focus on youth continued with a call for testimony about the readiness and fitness of Texas youth entering military service over the next decade.

Joseph McMahan is the Texas state director for Mission: Readiness, an advocacy group focused on making sure young people are fit to serve in the military.

McMahan testified that obesity is a major area of concern for military readiness and public health in general.

"Back in the day, a drill sergeant was able to run a few extra pounds off an overweight soldier. That's no longer the case,” he said. “First, it's frequently not just a few pounds. Recruiters are seeing kids show up 100 pounds or more overweight. Recruits can't make up for a lifetime of unhealthy habits in a few weeks of basic training.”

According to McMahan, the biggest disqualifiers for military service are obesity, lack of education and criminal history. He noted that physical education and recess drop off when students reach high school, and advocated for structured physical education requirements and certified PE coaches for students in grades K-12.

In Texas, 73 percent of youth between the ages of 17 and 24 would not qualify to serve in the military.

Carson Frame can be reached at carson@tpr.org or on Twitter @carson_frame