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State Lawmakers Debate Future Of Texas Economic Incentive Programs

Ryan Poppe | Texas Public Radio

There is a divide among state lawmakers regarding economic incentive programs for new and expanding businesses.  Some lawmakers and state leaders question whether these programs remain useful and beneficial for the state's economic growth.

The debate centers on local and state tax credits and multi-million dollar grants from the Texas Enterprise Fund, which is controlled by Texas Gov. Rick Perry and has awarded more than $500 million to businesses since the fund was set up in 2003.  

Speaker of the House Joe Strauss, R-San Antonio, set up the 13 member committee to look at the viability of these programs; programs that some see as slush funds.   

Greg Leroy, executive director for the national government accountability group Good Jobs First, told the legislative committee that over time these programs often become political pork.

"And once that happens, instead of leveraging truly new economic activity the dollars really become, too often, windfalls," Leroy said. "You’re paying companies to do what they would’ve done anyway most of the time, overwhelming most of the time in some cases, when programs are structured as entitlements."

LeRoy said the state's handling of these incentives is too selective and doesn’t target companies looking to fulfill a need that the state has economically.

"Public investment for job creation is effective when it benefits all employers in a market or many employers in a market, rather than putting a lot of tax-payer eggs in any one corporate basket," Leroy said.
But that isn’t how state Rep. Jason Villalba, R-Dallas, sees the program. Villalba said Texas has experienced a 6% job growth and that’s significant to individual communities.

“That one job matters to my community, so when someone tells me that’s not a good idea to bring jobs to this state from another state, I think that’s asinine,” Villalba said.

Other lawmakers on the committee say their communities have seen zero benefits to these incentives.