$19 billion dollars
That is how much Rick Perry has spent on recruiting companies to come to Texas–more than any other state in the country–according to the New York Times. Perry got a lot of attention for this story, but is it wasn’t the kind of attention that will benefit him politically. It reinforces his image as a big-government crony capitalist, a moniker first hung on him by Michele Bachmann. Using public money for private purposes is the kind of big-government action that tea party conservatives thoroughly dislike.
One might reasonably ask: What would $19 billion buy in state services? For one thing, it would could pump money into public education, which could fix the state’s perennial problem of ranking dead last in the number of adults who lack a high school diploma. It would underwrite research at the state’s major universities. It would allow the state to raise rates for health care providers, who have been squeezed in recent years, to the point where many will not take Medicaid patients. It would bail out hospitals that have to bear the burden of uncompensated care in their emergency rooms. It would go a long way toward funding the state’s water plan. It would allow the state to give teachers a pay raise. Texas has made scant progress in any of these areas during the Perry years.
The governor is entitled to have his priorities concerning state spending. But, for most of his governorship, he has had only one priority, which is enticing companies to move to Texas. Corporate subsidies are not the only reason for the job growth in Texas. In addition to companies moving here, the influx of population in the previous decade is another reason for growth. The surge in population has expanded the work force, allowing government and private employers to do more hiring.
Bodhisattva says:
You said, “… which could fix the state’s perennial problem of ranking dead last in the number of adults who lack a high school diploma,” but I think you meant dead last in the number of adults who HAVE a high school diploma.
Anyway, your point is well taken and sustained.
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I'm Pavlov. Ring a Bell? says:
I’m with TTARA on this. The NYT is off base.
http://www.ttara.org/files/document/file-50bfd6a4d9ff5.pdf
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Prismatic Reply:
December 7th, 2012 at 2:15 pm
I’m glad someone posted TTARA’s statement. I’m not sure which is worse: the Times knowingly juking the stats to write the story they wanted to write, or The Blog not knowing TTARA challenged the story’s merits (or even flat-out ignoring it).
One might reasonably ask: Might less taxes promote job growth in Texas?
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Jed Reply:
December 10th, 2012 at 10:38 am
we already have lower taxes than almost any other state.
companies who are moving based on the lowest possible taxes already have us on their short list.
what marginal gain would be had by lowering them even more?
one might add that this sales pitch is already likely to be attracting the sort of companies that care least about quality of life. but this is texas, so we don’t need to care about that anyway, right?
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Indiana Pearl Reply:
December 7th, 2012 at 4:36 pm
How do we know who’s behind TTARA?
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paulburka Reply:
December 7th, 2012 at 8:56 pm
The state’s biggest taxpayers and most successful industries.
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Indiana Pearl Reply:
December 8th, 2012 at 11:48 am
Not exqctly unbiased . . .
Beerman says:
Perry makes me laugh and sad at the same time!
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Blue Dogs Reply:
December 7th, 2012 at 2:34 pm
Beerman, Perry needs attention just like the fictional first lady on ABC’s Scandal, who keeps being like a little B.
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The Mustache That Dare Not Speak Its Name says:
“Using public money for private purposes is the kind of big-government action that tea party conservatives thoroughly dislike.”
That would be true if Tea Party conservatives were intellectually honest. Some are, but most aren’t (particularly in Texas, where Rick Perry was a Tea Party hero), and they are happy with big-government action if it’s used against people they dislike or in favor of people they favor. The Tea Party is mostly all about populist resentment, not principled libertarianism.
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José says:
Folks ought to understand that there’s a difference between creating jobs and stealing jobs.
0 + 1 = 1, whereas 1 – 1 = 0
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John Johnson says:
Just how many jobs did his give-a-way bring to the state? Divide that $19B by that number and tell me how much each job actually cost us.
We have a great state. Thank God for the natural resources we have underneath us and Texans with the entreprenural spirit to find better ways to get at them. We are special, but King Perry takes way, way too much credit.
Thousands of unemployed people flooded into Texas in the last several years due directly to Perry’s campaigning on how many jobs he had created when everyone else was going south. Everyone thought they could come here and find a job. All they found were long, long lines for state aid and food cards. He continued to brag about our unemployment rates when surrounding states all had better numbers.
He continues to twist and contort the truth. He has no shame.
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Palmer Reply:
December 7th, 2012 at 2:23 pm
John Johnson,
The “surrounding states” (except Arkansas) do have lower unemployment numbers. But, that is really beside the point — none of them have economy or population of Texas. States of similar population and economics — California, New York and Illinois
– have much higher unemployment rates.
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John Johnson Reply:
December 7th, 2012 at 3:38 pm
Are you serious, Palmer? “But, that is really besides the point”????
It is very pertinent, sir…and throws a little cold water on his skewed bragging.
I will also point out that we pay more for electricty than OK or LA, more for phone service, more for cable television, more of insurance, more for just about everything. We can say that we don’t pay any personal income taxes, but we more than make up for it by getting nickeled and dimed to death by “fees”.
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Cow Droppings Reply:
December 9th, 2012 at 9:46 am
John, I know your multiple reasons for distaste for Perry, but higher unemployment rates than neighboring states shouldn’t be one. Texas was creating jobs so fast during the recession, we were not only luring people for availabilities, but those without jobs who heard this was the place to find one. In other words, we were a victim of our own success. Some of Ohio and Michigan’d unemployed became our unemployed. Hardly Perry’s fault.
Blue Dogs Reply:
December 7th, 2012 at 2:27 pm
Johnson, another sign that Perry will NOT run again for a 4th term in 2014 and he’s already shown us he wants to live in the White House, so why even bother bashing our governor with crap like this.
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John Johnson Reply:
December 7th, 2012 at 3:39 pm
Are you and Palmer day drinking together?
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Blue Dogs Reply:
December 7th, 2012 at 4:53 pm
Who is Palmer ?
Dave Reply:
December 7th, 2012 at 5:00 pm
It’s 5 on Friday. Pour me one.
Jed Reply:
December 10th, 2012 at 10:41 am
“Texas was creating jobs so fast during the recession, we were not only luring people for availabilities, but those without jobs who heard this was the place to find one. In other words, we were a victim of our own success. Some of Ohio and Michigan’d unemployed became our unemployed. Hardly Perry’s fault.”
I know right, CD? If only someone had been able to foresee that racing to the bottom to attract companies might have some effects beyond (or rather instead of) simply lowering unemployment. But fortunately, not that you’ve had this insight, we won’t have to hear any more in the future about the virtues of giving away revenue to attract more companies here …
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WURSPH says:
Two brief items:
First, Perry’s attitude to these kinds of incentives is a perfect example of the Motto of the Modern American (especially Texas) businessman:
All I want from government is a fair advantage.
Second, some years ago I was at a conference of state legislative finance specialists (LBB types from the various states) where they had a lengthy discussion of these “I can steal jobs from you” programs.
The session ended with a mutual pledge by all to go home and try to convince their leadership that the programs hurt both their home states and the country as a whole….but they all knew it would not work. The need to announce “I brought new jobs to ………” (even when it was simply jobs they bribed someone to move from another state) was just too strong…..Nothing has changed since then.
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Blue Dogs Reply:
December 7th, 2012 at 2:28 pm
Every other of his predecessors have done THE SAME THING too you know.
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John Johnson Reply:
December 7th, 2012 at 3:45 pm
I just love the argument, “Well, everyone is doing it.” It chapped my rear when my kids used it, hoping it would change my mind, and it does the same when people like you throw is out there.
What difference does “everyone is doing it” make? It’s wrong. Does being the eleventh looter into a store make the eleventh guy innocent because he was the eleventh guy? Please don’t spit that out again, BD. Try something new.
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anon Reply:
December 9th, 2012 at 2:45 am
There was no Texas Enterprise Fund before Perry. Neither Richards nor Bush participated to this extent with financial incentives. Please look back at Richards dogged pursuit of Southwestern Bell’s corporate HQ to San Antonio as an example.
Blue Dogs Reply:
December 14th, 2012 at 1:01 pm
Johnson, I graduated from Baton Rouge Community College and served in the USAF Reserve for 6 years including 3 in the TX Air National Guard.
Robert says:
I’m not for using public money to bribe companies but, your ideas about what that same money could buy in state services is silly. The $19 billion used creates more taxpayers which pay taxes for decades to come. Spending it all over one or two budgets leaves you with nothing.
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John Johnson Reply:
December 7th, 2012 at 3:45 pm
Unless they are given massive tax breaks.
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Dave Reply:
December 7th, 2012 at 4:15 pm
The $19 billion in incentives is per year.
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The Mustache That Dare Not Speak Its Name Reply:
December 7th, 2012 at 7:58 pm
$19 billion spent in improving our state universities (or at least in keeping tuition down) would do a lot for creating future taxpayers.
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shasta says:
Paul, did you read this article? perry isn’t giving away the entire $19 million. much of that is tax abatements given at the city and county level. I know there are counties along the gulf coast who haven’t taxed new industrial construction in a decade. This has been an issue for 30 years. In 1980 industry paid 80 percent of property taxes in Texas. Now it’s well below 50 percent.
That’s your story.
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paulburka Reply:
December 7th, 2012 at 9:00 pm
It’s $19 BILLION, not $19 million, and I don’t approve of it whether it is tax abatements or other special tax breaks that Perry’s pals like Brint Ryan get a cut of. Everything Perry does somehow involves cronyism.
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shasta Reply:
December 11th, 2012 at 8:46 am
Sorry 19 billion. My bad. it’s still not perry giving it all away. The problem is much deeper than him.
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Blue Dogs Reply:
December 14th, 2012 at 1:01 pm
Burka, what about Obama’s cronyism?
Something tells me Perry and Co., will have you fired if you keep doing this investigating stuff.
Have you watched Starz TV’s Boss show with Kelsey Grammer: he plays the corrupt Chicago Mayor who had a newspaper journalist fired.
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CaptainJack says:
“Apparently the company that provided the Times their data has disavowed how it was used”
In particular, you should draw particular attention to the comments:
“Now that we have had a few days to examine the Times database, we see that there are some flaws in the way the paper used our data.”
“After getting our raw data, the Times did not consult with us on exactly how it would be used. We thus had no opportunity to warn the paper against the perils of aggregation.”
http://clawback.org/2012/12/06/summing-subsidies/?utm_source=Clawback+to+E-list+12.6.12&utm_campaign=Clawback+to+E-list+01.31.12&utm_medium=email
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Anon says:
Way to read the story Burka. God, you are awful at your job. Wait, I know- it’s a blaaawwwwgg so you don’t need to be troubled with crazy things like actually reading what you’re reporting on.
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paulburka Reply:
December 7th, 2012 at 9:02 pm
I based my reporting on the Times story. If the Times misused the data, that the Times’ problem, not mine.
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Disgusted in Denton says:
I’m sick of R’s trumpeting the merits of our state’s infrastructure while simultaneously dismantling it. Why do we kick eco deco butt, because those before us actually cared about the future of Texas. If one hand is gutting schools and ignoring water and roads, the other hand best be feeding graft to corporate America to keep the illusion of progress alive and well.
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Alan says:
If they’re a bad investment at the state level, they’re even worse at the county and municipal level. The amount of money big-box stores like Wal-Mart and Bass Pro Shops extract from podunk towns makes The Music Man seem like an honest businessman. Millions of dollars in foregone revenue for the privilege of a tacky strip center and for residents to have an ample supply of $8-an-hour joke jobs to work at (which, had their town council known when to fold ‘em, they would have had anyway – they just would have to drive to work a few miles away in the town that was stupid enough to offer up a sweeter sweetheart deal).
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paulburka Reply:
December 7th, 2012 at 9:04 pm
The worst of these deals was the one that brought a Countrywide call center to the Permian Basin. It shut down in the blink of an eye after the Lehman Brothers collapse.
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rw says:
Of course a lot of people who come to Texas are adults without a high school diploma or even basic English skills. California has the same problem. I suppose they don’t spend enough on education as well?
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Jed Reply:
December 10th, 2012 at 10:43 am
uh, correct?
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jpt51 says:
Ignorance is bliss for Texas taxpayers, until one needs state services – only to find they don’t exist or are dreadfully underfund.
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anon says:
Did the Times article extrapolate the amount of money contributed to Perry by Ryan, his clients and the other recipients of Perry’s corporate welfare?
Why is it legal for a contigency arrangement in pursuit of this largess — it’s not legal for a lobbyist to take a client on a contingency, and Perry certainly finds plantiffs relationships with attorneys pursuing civil justice on a contingency to be abhorrent.
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JohnBernardBooks says:
Let me see if I understand, stimulus money by dems good and tax abatements by republicans bad?
Do any of you even know how a tax abatement works?
But why bring common sense into the discussion when the prupose is to bash republicans?
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anon Reply:
December 8th, 2012 at 12:33 pm
JBB, I believe a stimulus is designed to benefit the economy in a broad way, while a tax abatement is specific to a single entity, a benefit to a favored company.
But I take it you’re all for it if Perry is for it, that seems to be your measure of “common sense”.
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JohnBernardBooks Reply:
December 9th, 2012 at 3:55 pm
If tax abatements bring a company to an area and they hire workers who pay taxes or bring workers and they buy homes and pay taxes, I can see how liberals would hate that.
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Anon Reply:
December 10th, 2012 at 8:22 am
Yes, liberals hate conservative socialism.
Anon Reply:
December 10th, 2012 at 8:23 am
tax abatements are nothing more than favoritism and cronyism.
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Willie Reply:
December 10th, 2012 at 8:23 am
All they are is a local stimulus package…..socialism.
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Anonymous says:
Yes, JBB, we dems do know how Socialism, er…I mean tax abatements work. They are an intervention into the free marketplace. A manipulation that takes away true competition, and replaces it with Government picking and choosing which private company wins or loses. I’ll scoot over on the big government bench and let you sit down, you big government manipulator of the free market you. Oh, and welcome to club Eurosocialism.
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linda says:
“the surge in population….allowing more hiring” needs to have the sentence end with this: at lower wages, which keeps our populace struggling but benefits the businesses.
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John Johnson says:
Obama’s special healthcare deal for union members in return for votes is a quid pro quo arrangement. His Solyndra type deals in return for campaign contributions the same.
Perry has feasted on these type of stinky deals for years, and his lobbyist buddies help put them together…many of whom worked for him at one point in time, or were once elected Repub legislators. Energy, communications, insurance, road building, high tech…you name it…Perry got paid indirectly from all of them…even using a circuitous route through the U.S. Governors’ Association on occasion.
It’s all legal because the Governor and our legislature refuse to make it illegal. Very seldom in life do we get something for nothing. This is especially true where elected officials in Austin and D.C. are concerned.
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Blue Dogs Reply:
December 14th, 2012 at 12:59 pm
Yet Obama still got re-elected despite these scandals.
Perry managed to win re-election in ’06 and ’10 depsite controversy and skeletons coming out of the closet.
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Anonymous says:
If I were a business owner in Texas, I would be pissed at the special tax treatment given to the businesses being pursued at the expense of citizens and businesses that have been here for decades.
Bring Ryan sounds like a strange guy that makes a killing off milking the public teat.
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Anonymous says:
Agree, it must give the local hardware guy a warm and fuzzy feeling to know that his taxes are going to subsidize Walmart coming to town.
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Anon says:
As they say in publishing: “he’s buying the business”…..
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Moderate says:
Anonymous at 11:14, in the communities I work with, those same abatements are possible for existing businesses that are expanding, and in some cases, threatening to leave. It’s called Business RETENTION & EXPANSION – look into it.
Incentives and abatements are two different things, but are often referred to interchangeably, particularly by people who do not understand economic development. Incentives are cash payments to a company to entice them to locate. In most cases, the agreement will have a clawback provision that the company will have to return the money if they do not perform as promised. The problem, as we saw with Solyndra, is that it’s hard to squeeze blood from a turnip if the company goes under.
Abatements, on the other hand, are not cash up front, but rather a deferral of taxes due. Most of the time these are done on property taxes, not on inventory, etc. If the company locates, they can have their taxes deferred for a period of time, usually on a graduated percentage rise (based on jobs created, capital investment, wage requirements, etc.) These are also subject to clawback provisions (if the community is doing their job). Most of the projects that I have witnessed use these methods were on raw land, sometimes with an ag exemption, that were generating very little tax revenue to begin with.
I am not advocating for or against incentives, but I definitely think that abatements end up being a good deal for the communities involved.
The property generates WAY more revenue than it ever would without it. And if it is on an existing property expansion, the abatement is only on the increase, not on the existing. Again, win-win because it keeps a good, expanding company in your community instead of being subject to being lured away by someone offering a better deal.
Many communities put in wage requirements for salaries of the employees and do not offer these benefits for big-box retail projects. When used responsibly, these can be very effective tools to grow your community. But they must be used wisely.
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JohnBernardBooks says:
Texas is becoming infested by liberals:
“About 100,000 more people moved away from California in 2011 than relocated to the Golden State, according to the latest report from the U.S. Census Bureau.
The Census Bureau calculates that the most popular destination is Texas (58,992), a state that is luring California companies.”
The downside to luring business to Texas the looters soon follow.
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Jed Reply:
December 11th, 2012 at 9:01 am
awesome. now two wingnuts have figured it out.
can it be long before we stop throwing money at companies to have them bring us their problems?
only a couple million more wingnuts to go …
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Blue Dogs Reply:
December 14th, 2012 at 12:58 pm
Texas will always be a conservative state: has been and will always be conservative FOREVER.
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Jed says:
ps – almost forgot:
are “looters” the “makers” or the “takers”?
i’m liking the maker/taker thing more and more all the time.
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