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Texas Economic Development

07.01.2010

We’re six months away from the next regular session of the Texas Legislature. Back in January Lt. Governor David Dewhurst issued the Senate interim charges related to job creation in Texas. I was glad to see two items focused on workforce development, especially in the context of job creation:

Make recommendations for legislation to improve and enhance workforce development in Texas. Economic Development Committee

Study and make recommendations regarding career-focused education and workforce training programs in Texas to insure that such programs meet business and worker needs. Business and Commerce Committee

Here are a few more ideas I’d like to see discussed:

1. Launch a statewide economic gardening program to help growth companies create jobs. Florida is proving with GrowFL, launched with only $1.5 million, that the concept is viable at the state level and can produce results. The Texas Legislature is facing a projected budget shortfall of up to $17 billion for 2012-2013, so I don’t think we’ll see too many proposals for new programs. But surely we can spare a few million from the Texas Enterprise Fund to make this happen. This is the future of economic development and we can’t have Florida making us look bad.

2. While the return on investment from the Texas Enterprise Fund is debatable, I think the Texas Emerging Technology Fund (ETF) is living up to its billing. The financing gap for innovative companies is very real, and, regardless of how you feel about governments operating in private markets, you can’t argue with the public-private partnerships that have created places like The Research Triangle Park. The ETF is staffed by seven Regional Centers of Innovation and Commercialization (RCICs) that are responsible for coordinating applications and vetting potential investments. Why not leverage the knowledge and experience the RCICs have gained to offer other economic development services? Maybe we could house GrowTX at the RCICs. This seems like an underutilized asset to me that could produce results with sufficient resources.

3. Speaking of underutilized assets, we need a stronger partnership between state economic development staff and the 24 councils of governments (COGs). The Governor’s Office does a good job of keeping the lines of communication open, and plenty of opportunities exist for networking at Texas Economic Development Council events and the like. But I think we can do better. Most COGs in Texas operate a federally-funded Economic Development District responsible for planning, coordinating grant applications, and assisting local governments with economic development tasks. We need a vision for how state government can work with the COGs and regional chambers of commerce to provide a seamless delivery system in Texas. We could start by making sure that somebody at each COG is informed about leads the Governor’s Office is pursuing and coordinating RFP responses from their member governments when appropriate.

4. We’ve been debating school districts offering tax abatements to companies as part of economic development agreements. The State of Texas currently reimburses school districts for foregone revenue, but, still, money is money and it has to come from somewhere. I’m not “for” or “against” tax deals, but I think we can be a little more creative and bold in our thinking. It’s naive to think that companies making large investments won’t ask for tax incentives, but why not offer an alternative before granting them? Instead of tax abatements, why not offer to invest that money in career and technical education in the school district where the company is locating? We’ve recognized the importance of workforce development to job creation, and more career and technical education in schools would be an excellent start. Sure, you may risk a sideways glance from a prospect or site selector, but I think many companies would at least pause to consider it.

If we’re going to be the state of big ideas, we need to have more big ideas worth crowing about.