July 23, 2014 5:17 PM

House panel digs into economic incentive funds used to lure jobs to Texas

Sparks fly over ideology versus what happens “in the real world”

The special Texas House committee appointed by Speaker Joe Straus to scrutinize Gov. Perry’s job-luring pots of money – chiefly the Texas Enterprise Fund – got down to work on Wednesday. In its first hearing, the House Select Committee on Economic Development Incentives listened to expert witnesses for and against the incentives that were called everything from “interstate job piracy” to essential “tools in the toolbox” for continuation of the state’s dynamic economic growth.

Chair of the committee, Rep. Angie Chen Button, R-Richardson, stressed that while Texas has been a dominant economic engine among the states, it is important to ensure that "any spending has greater benefit than cost to taxpayers.”

The Texas Enterprise Fund, according to the state's numbers, has been used to invest more than $560 million in businesses that either moved to Texas or expanded operations here. 75,000 jobs have been created as a result, according to those state numbers. The TEF and the Emerging Technology Fund, both used and touted by Perry over the years, have come under fire from some on the right who call them “tax cronyism” and some on the left who say they amount to “corporate welfare.” In asking lawmakers to study this, Speaker Straus said “We owe it to taxpayers to take a detailed look at what has worked and what can be improved.” Some programs may need “retooling” and others have possibly “outlived their usefulness,” Straus said.

A very vocal critic of the funds, Greg LeRoy, who’s the executive director of a Washington-based group called Good Jobs First, said lawmakers need to be careful that they don’t allow incentives to turn into subsidies. The difference, LeRoy said, is that an incentive gives a company a reason to do something it would not otherwise do while a subsidy is the act of “paying companies to do what they would have done anyway."