HAMER: Here's How Texas Ensures Economic Security & Promotes Its Technological & Manufacturing Independence

Incentives are important to lure companies to relocate

By Glenn Hamer

AUSTIN, Texas (Texas Insider Report) —
 On Dec. 31, section 313 of the Texas Tax Code, which grants property tax abatements to companies moving to or expanding in the Lone Star State, will expire. Citing a lack of transparency into the program that left taxpayers and schools frustrated and feeling as though they were on the short end of the stick, the Texas Legislature chose not to renew the economic development program.

While the program had run its course, and the Legislature’s concerns were valid, the ending of a program that puts Texas at a disadvantage when it comes to competing for projects is nothing to celebrate.

Contentions by those who claim that an incentive program is not instrumental in luring companies to the Lone Star State miss the mark. While incentive programs are not always the deciding factor when it comes to a company deciding to relocate or expand, there is no doubt it is one of the most important pieces of the pie.
Without an incentive program, Texas will not be on a level playing field when it comes to competing for big projects bringing jobs to local communities.

Most states have taken a page out of Texas’ playbook and are now winning projects that Texas has traditionally won.

For example, Intel is building a $30 billion chip facility in Ohio, Rivian is completing a manufacturing facility in Georgia, and Ford is constructing new facilities in Tennessee and Kentucky.

What’s more, recent global events such as the COVID-19 pandemic, the ongoing war in Ukraine and Chinese tensions with Taiwan have left the United States dealing with an unprecedented supply chain crisis that continues to hurt our economy and is leading to shortages in everyday products for Americans.

As Gov. Greg Abbott (right,) pointed out in a Fox Business interview:
"The country made a mistake over the past one or two decades to farm out manufacturing of all these essential supplies, whether it be now semiconductors or health care supplies that we needed during the time of COVID-19.

"We need to not depend upon China or other countries for our essential needs.”

And Lt. Gov. Dan Patrick’s “Texan’s Back to Work Taskforce” made the point about opportunities for enhanced manufacturing in its report on the pandemic, saying:
“The potential increase in domestic manufacturing activity offers significant opportunities for Texas, assuming that the state maintains its current advantages in workforce, business climate, cost factors, and transportation infrastructure.”

Texas and America must never be reliant on another country, particularly an adversary, for its most basic needs. That is why it is important to incentivize the next wave of manufacturing, energy production, health care and the strategic production of everyday goods right here in the Lone Star State.

A revival of Chapter 313 is not the solution. A new and more transparent incentive program that benefits our communities, schools and state is needed if we are to ensure Texas can continue to compete with other states and countries, while securing our economic future. And Speaker of the House Dade Phelan has called for a program with “more accountability and oversight.”

This upcoming legislative session we have a unique opportunity to do just that.

It’s time to support a new, modern and transparent economic development program that will ensure Texas’ economic security, promote technological and manufacturing independence from foreign nations, help solve the supply chain and shortage crisis, and create new capital investments in our communities, giving our children greater opportunities and local schools additional resources.

Glenn Hamer is the CEO of the Texas Association of Business.