Time for an overhaul, possible elimination, of state incentives

Is it a business incentive or corporate welfare, a tax break or a tax giveaway, an enterprise fund or a slush fund?

The debate over spending taxpayer money to benefit private businesses is the subject of intense debate as cities, states and even countries compete for jobs and investment. Texas lawmakers have begun examining the state’s programs, a process that will stretch into 2015 as Texas undergoes one of the most profound leadership changes in the last 100 years.

Activists from across the political spectrum are questioning Gov. Rick Perry’s “Open for Business” shtick of funding individual corporations, and frankly, it’s about time.

Texas House Speaker Joe Straus has answered tea party calls to end cronyism by appointing a Select House Committee on Economic Development Incentives. Chairwoman Angie Chen Button, R-Richardson, has scheduled six hearings through November to make recommendations on future incentive programs.

A good first question is, what exactly is a government incentive? Governments fund schools to supply labor, construct pipelines to deliver water and build roads to deliver goods to market, but those are not considered subsidies.

For today’s businesses, though, that doesn’t seem to be enough. For 14 years Perry has argued that to attract investment and jobs, the state must not only offer tax breaks, but also write checks to companies from programs like his Texas Enterprise Fund and the Emerging Technology Fund.

Something as vague as "more jobs" doesn't meet that test and smacks of crony capitalism. Government should simply set the conditions for success with policies that impact everyone equally, and then step back and let the market work it out.
July 30, 2014
Houston Chronicle