A belief that our state government wastes money on pet projects is a truism of modern Texas politics. Despite a displeased frustration with well-funded political favoritism, taxpayers may not know the major reason why elected officials continually defend it: organized interests.
Fewer arenas offer a better case study for this than the Texas Legislature. The Lone Star State is the nation’s largest provider of state economic development incentives. With millions in taxpayer dollars on the line, there are plenty of interests looking to put their nose in the trough.
We have reported before on one of the state’s major economic development incentive programs and some of the players who profit from it.
The fabled “Iron Triangle” of American Government textbooks takes sharp relief when given flesh-and-blood placeholders.
In the Texas House budget amendment battle of 2013, conservative reformers fought to defend taxpayers from frivolous special-interest handouts in the form of the Texas Moving Image Industry Incentive Program (TMIIIP), and the Texas Commission on the Arts among many others. Just as dependably, an army of grow-government big spenders rose up ready to defend the waste—ensuring continuance of the politically well-situated expenditures.
The first reason proponents of subsidies or pet programs fight their elimination is because they themselves have something to lose.
One memorable case involves an amendment to Amendment 71, proposed by State Rep. Jeff Leach of Plano–attempting to direct funds away from Texas Film and Music Marketing (the budget item containing the TMIIIP) and to the ailing Teacher Retirement System.
For the Moving Image Industry Incentive Program—Rep. Larry Gonzales lamented the potential for job losses due to the loss of state funds to a video game developers in and around his district. In a shameful, belittling, and disrespectful overture, Gonzales castigated Leach for even questioning the state’s role in subsidizing video games. Through this, Rep. Gonzales revealed a sadly familiar facet of the budget process: everyone hates handouts—unless it is their handout.
The democratic process inherently favors the will of small, organized interest groups over that of large, diffuse ones: this means the taxpayers are at a distinct disadvantage in vying for legislators to act in their best interest. Remember, the Austin establishment boasts legions of individuals whose sole professional purpose is to extract your money from state coffers for these programs.
In the case of the controversial Texas Enterprise Fund (TEF), any member with a major TEF beneficiary in their district will likely be the first to oppose its removal—hence politically-motivated, needless spending is virtually guaranteed “eternal life.”
For special interests, the loss of an incentive represents a major cost, only granting taxpayers a marginal benefit of paltry pennies in reduced taxation if axed. A death-by-a-thousand incentives results in major economic distortion and budget bloat as many special-interest rent-seekers use the political process for their benefit.
For taxpayers, there is only one solution: change the incentives. Rewarding politicians who support their taxpaying constituents over the Austin lobby is the way Texans can chart a path toward greater self-government—not eternal life for wasteful spending.