Criticized Texas Subsidy Program Takes a Big Haircut
State tax revenues are in a tailspin as housing values decline. Every state is feeling the heat and making tough decisions. With the budget in dire straits, Texas’ Governor Rick Perry has proposed an across the board 10 percent reduction, which surely will result in painful consequences. But one cutback we’re not teary-eyed over is Gov. Perry’s announcement to thin some big economic development programs.
Yesterday, Gov. Perry proposed shaving off $38.7 million (out of the $256.5 million available) from the Texas Enterprise Fund (TEF) and the Emerging Technology Fund. Texas also trimmed back on controversial film subsidies.
Recent reports have accused the Governor of using TEF for political patronage and failing to protect the taxpayer’s buck. Whatever the reason, even a terrible fiscal climate, we laud reining in on programs that aren’t effective and are apt to be abused.
As this recession wears on, we wonder whether states will choose to take a closer look at the $30 to $60 billion spent each year on economic development, often to the benefit of a few companies which have the boldness to ask for our tax dollars.