Governor Perry’s signature economic development programs are under the microscope again this week. Perry, meanwhile, was in New York, talking up the “Texas Miracle” and challenging Governor Cuomo to a debate, who has also been very active in economic development the last few years, to the tune of $1.5 billion.
Given the flurry of activity, I thought it would be a good time to update my Texas: Miracle or Myth presentation from the TEDC conference last October. Here are the claims for your consideration:
1. Texas is leading the U.S. in job creation.
2. Texas has the fastest growing economy in the U.S.
3. People are fleeing California for Texas in droves.
4. Most new jobs in Texas are low-wage.
5. Economic growth in Texas is due entirely to oil and gas extraction.
Is each statement mostly miracle or mostly myth? Click on the image below to jump to the slides for my take.
Political theater is an easy target, but behind this “debate” is a serious challenge for local economic development efforts in Texas. The standard narrative of the Texas Miracle–low taxes (including no income tax), lax regulation, and business-friendly legal environment–serves as a distraction from recognizing the contributions of the nearly 700 combined Type A and Type B economic development corporations in the state. If economic prosperity can be guaranteed with sufficient commitment to the Miracle formula, then why should communities continue to support the investment of sales tax revenue into community and economic development projects? Why not eliminate the EDCs, lower the sales tax rate, and watch the private investment and jobs come rolling in?
That would be a mistake. While we need more EDCs to take a leadership role in championing things like career and technical education and workforce development, the program as a whole is one of the best vehicles you will find in the country for making community-driven economic development possible. EDC expenditures represent a small fraction of total state tax collections and provide important resources for communities in an environment of declining support from federal and state agencies.
A real miracle defies explanation. Local economic developers in Texas, along with their business, community, and education and workforce development partners, deserve better than that.