One of Mayor Parker’s signature policy items is now law.
Houston City Council passed Mayor Annise Parker’s Hire Houston First initiative by a 13-1 vote Wednesday, allowing and sometimes requiring city departments to choose the second lowest bid for purchases and contracts if the runner-up company is from the eight-county greater Houston area and it’s a close call.
The 5 percent edge to local businesses applies to city purchases under $100,000. For spending greater than $100,000, the local company has to be within 3 percent of the low bid.
Former county tax assessor-collector Paul Bettencourt called the measure “protectionism.” He said, “Trying to hold jobs by putting up a barrier to competition just means the taxpayer pays more in the end.”
University of Houston economics professor Steven Craig, who has studied purchasing preferences at the state level, said they are by definition net losers. While 100 percent of the costs of a preference are born by local taxpayers to cover the increased cost when the lowest bid is not chosen, the benefits do not necessarily stay local.
Local firms that win contracts only because of the preference may not spend the profits locally. The boss may use his windfall to vacation in Europe instead of Texas. The company may buy its supplies in China while the losing low bidder buys locally.
Say it with me now: Who cares what Paul Bettencourt thinks? He’s just another private citizen. Why is a quote from him more newsworthy than one from any other former county official? If what you say is “because he’s supposedly thinking about maybe running for Mayor some day”, I say “the line forms to the left”. If that’s the key factor, you could fill the entire news hole with such quotes.
Oh, and for grins, go Google “Paul Bettencourt Texas Enterprise Fund”. You know, since he cares so much about government interfering in the free market for employment.
As for Prof. Craig, I’m not familiar with his work, so I can’t critique it. I’m generally a skeptic of using public funds to lure businesses to a particular location, so his general conclusions don’t surprise me. In this case, I suspect the overall effect may be fairly small. How many times in, say, the last five years do you think a firm that meets the Hire Houston First criteria would have missed winning a bid against a non-Houston firm by a sufficiently small amount? There ought to be an objective answer to that question if anyone wants to wade through the data. My guess would be not that often, but who knows? Maybe someone will track that going forward.