Questions asked about Perry’s job-stealing trips


As Gov. Rick Perry visits Maryland in his latest effort to recruit businesses to relocate to Texas, a Washington, D.C.-based group is taking aim at what it calls the governor’s “piracy trips,” raising questions over how they are funded.

A report by Good Jobs First says that despite the governor’s office’s statements that state funds are not used for the trips, local sales tax funding is indeed used to cover travel expenses and advertising related to the trips.

“Texas taxpayers have a right to know about the public funds that partially support TexasOne,” said Greg LeRoy, executive director of Good Jobs First.

The press release is here and the full report is here. Let me quote from the press release, as it gives a fuller picture of what the study is about:

The job-piracy trips represent an enormous surge in spending for television and radio advertisements that feature Gov. Perry himself. In eight months, TexasOne has spent about $1.8 million in advertising buys to publicize Gov. Perry’s job-piracy trips. That sum exceeds TexasOne’s entire FY2012 budget by more than half a million dollars, and is about nine times what TexasOne spent on advertising and promotion in FY2012.

The study finds that scores of local Economic Development Corporations (EDCs), funded by local sales tax dollars, as well as some city and town governments, and other local government agencies in Texas, form the most numerous group of dues-paying members to TexasOne and accounted for about one fourth of its revenue in FY2012. However, the federal tax returns of the non-profit 501(c)(3) corporation that sponsors TexasOne refer only to “private contributions.”

The study also points out that Gov. Perry’s press releases announcing his trips include a funding disclaimer that prompts more questions. They say state funds aren’t used to pay for the advertising air time or Gov. Perry’s travel or accommodations, but they are silent on local taxpayer dollars, and the trips involve many other expenses.

The study also finds 40 corporations funding TexasOne, including two dozen that are publicly traded companies or subsidiaries of such companies. Some serve national markets; some even have headquarters or large facilities in states that Perry is trying to lure jobs from.

These are all good points, and I’m glad to see them get an airing. One point that I’ve brought up before only gets mentioned in passing in a footnote, however:

This study does not explore the effectiveness of Texas’ job-piracy efforts. For that topic, we refer readers to a study we released in January 2013 entitled The Job-Creation Shell Game. There, we chronicle the history of interstate competition for capital, and detail several arguments why interstate job piracy is wasteful and ineffective. We refer readers to that study for those arguments. One key point we demonstrated is that Texas, like every other state, gains or loses microscopic shares of firms and jobs due to interstate in-migration (net of out-migration). All or very nearly all of the job-creation action is attributable to the expansion of existing firms (net of contractions) and to start-ups (net of firm deaths). Therefore, state resources are most effectively spent helping firms start up and grow (and helping them avoid layoffs and shutdowns). At (regarding Texas specifically, see pages 4-5 and 16-20)

So the bottom line remains that Perry’s gallivanting around is a failure on every level except for one – the promotion of Rick Perry.

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