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Are free markets or government intervention the best way to create jobs?

Lt. Gov. Dan Patrick has weighed in on the debate, turning his attention to the widespread failings of economic development in Texas. One of his interim committee charges directed members to evaluate and recommend corporate handout programs for reduction or elimination. Among these state-level programs are the Texas Enterprise Fund, a trio of Event Trust Funds, and the Texas Moving Image Industry Incentive Program, plus many others that purport to use public funds for private capital investment, job creation, and other state and local projects.

Momentum appears to be building on the side of the taxpayer. Last session saw Gov. Abbott both signing a bill to repeal a subsidy program initiated under his predecessor, and also calling for reform of the Texas Enterprise Fund. Referring to a relatively business-friendly low-tax and regulation environment (the Texas Model), he told a group of reporters last summer that “Texas is an easier sell today … than it has ever been,” and “I don’t like this specter of picking winners and losers.” As evidence of shifting attitudes, the previous legislature repealed the Emerging Technology Fund, aimed at tech startups.

Also during last session, Rep. David Simpson (R-Longview) castigated leadership and other members during debate of SB 293, a bill first filed by Rep. Jason Isaac (R-Dallas) which retroactively extended tax dollars to events that had already occurred outside of the reach of the Major Events Trust Fund to new entities. The same day it was signed, the comptroller approved a previously rejected application by NASCAR, resulting in a windfall of over $800,000. Despite Rep. Simpson’s repeated objections over the constitutionality of the bill, House Speaker Joe Straus proceeded regardless, and the bill was passed on a vote of 114-27.

Still, market advocates face an uphill battle. A recent study showed that incentives like the Texas Moving Image Industry Incentive Program and tax credits have “no effect on wages … no employment effect,” and did not “[affect] gross state product or motion picture industry concentration.” Despite its multiple failings, the program was extended during the last legislative session, over objections and maneuvering to defund it by State Representatives Matt Rinaldi (R-Irving) and Matt Shaheen (R-Plano).

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