AUSTIN, Texas (Texas Insider Report) — If Texas were a nation, it would be the world’s 9th-largest economy – larger than Canada, Mexico, South Korea and Russia. Soon, the Lone Star State’s GDP is expected to surpass Italy as the 8th-largest economy. But since Dec. 31st, Texas has been unilaterally disarmed in the national contest for continued economic development.
Our state is blessed with natural resources, a large population and a geography favorable to international trade. But those alone don’t account for the phenomenal growth of the Texas economy.For decades, Texas leaders have championed business-friendly policies and incentives to build the state’s economy, attract and grow businesses and develop a talented workforce. That's why Texas just won the Governor’s Cup for job creation from Site Selection Magazine for an 11th straight year.
The intense competition to attract major business investments that create good-paying jobs takes place at an international level. Other states and countries provide a variety of incentives to lure investments.
To remain competitive, we must ensure we level the playing field.
The intense competition to attract major business investments that create good-paying jobs takes place at an international level. Other states and countries provide a variety of incentives to lure investments.
To remain competitive, we must ensure we level the playing field.
One tool Texas had used since 2001 was an incentive program known as Chapter 313, named for its location in the Texas Tax Code. For businesses making major capital investments and future construction plans, Chapter 313 allowed school districts to limit the taxable value of a portion of their school district property tax for 10 years. The state compensated the district for most of the lost tax revenue for the term of the agreement – while school districts and communities across the state reaped the benefits of additional revenue from the remainder of property taxes, increased economic activity and jobs.
- READ MORE: Texas Hits New Historic High, as Total Jobs Increase for 14th Month In a Row
- With over 650,000 jobs added in 2022, total Texas jobs reach new high of 13,705,500 at year end.
In a competitive environment in which other states are courting the same businesses, the losses for Texas, the Texas economy, and Texas job-seekers aren’t merely hypothetical. With Chapter 313 set to expire last year, among the deals known to have been lost to lucrative incentives in other states were:
- multibillion investments from electric vehicle manufacturer Rivian that went to Georgia, and
- chipmakers Intel and Micron that went to Ohio and New York.
Nowhere has Chapter 313 been more beneficial than in the Austin-San Antonio Region, where state-level incentives have helped create more than 185,000 jobs over the past 20 years. Some of the notable deals in which incentives played a key role include:- Toyota
- Microsoft
- Caterpillar and
- Navistar for the San Antonio area,
- and Oracle
- Tesla
- Samsung and
- Apple in the Austin area.
Since Dec. 31st, Texas has been unilaterally disarmed in the national contest for economic development.
Now is the time for the Texas Legislature to act – to keep building on our state’s economic successes, to prevent Texas from losing more jobs and investments to other states, and to make sure we continue to lead the nation with further phenomenal growth of the Texas economy.
Gary Farmer is president of Heritage Title Company, and is the chair of Opportunity Austin. Michael Lynd, Jr. is CEO of Kairoi Residential and serves on the executive committee of the Greater San Antonio Regional Economic Partnership.
