What is the economic engine behind Texas’ jobs creation? Here’s a hint: It’s not the state’s corporate welfare funds. A new report shows that the Texas Emerging Technology Fund (TETF) is doing a poor job of creating jobs, despite the millions of tax dollars invested in start-up firms.
Only 1,236 jobs were reported by firms receiving TETF subsidies in Fiscal Year 2012, down 16 percent from the previous year. That’s despite the 2-3 percent average increase in jobs the state has seen as a whole since the 2009 recession.
And to add insult to injury, the governor’s office reports that $6 million is being written off in expected losses on “potential bad debts”—investments the state does not expect to recover.
That’s $6 million of your tax dollars being used as government-sanctioned venture capitalism. Satisfied with your investment? Too bad you don’t have a choice.
The TETF has spent $194.7 million since 2005—more than $200,000 per job created—on companies that seem to be doing just fine drawing in private investments and other funding sources.
But despite the dismal reports on the state’s slush fund for start-ups, Gov. Perry is still calling for an additional $139 million of your money to fund the TETF for another two years.
So far, budget writers in both chambers have zeroed out the fund’s balance for the upcoming biennium. They would be wise to keep it that way. Free markets and low taxes are, and will always be, the most effective catalysts for job creation.
