Cobler: Researcher spotlights 'invisible incentives'

Chris Cobler

The Texas Enterprise Fund took a hit for lack of transparency in a new research paper from the National Freedom of Information Coalition.

The paper by journalist Steve Miller is titled “Invisible Incentives: How Secrecy Impedes Evaluation and Accountability of Economic Development Subsidies.” Part of the paper spotlights the Texas Enterprise Fund, which the Legislature created in 2003 to provide taxpayer money to companies in exchange for the promise of jobs. 

“But in numerous cases, the money has been paid and the companies left shortly after the deal was completed, taking the jobs with them,” the paper’s author writes. “The public rarely hears of it, and the money spent is rarely recouped, although because of the opacity surrounding the TEF, it’s difficult to discern if any financial recovery by the state is achieved.”

The problem is the same across most states, according to the paper, which concludes with this recommendation: “Opening the records, fully, is the best start to handing the decision to the public.”

Renae Eze, Gov. Greg Abbott’s spokesperson, responded in a statement to the researcher’s assertions.

“When he first entered office in 2015, Gov. Abbott established procedures to ensure the protection of taxpayer money and transparency in the spending process, including changing the Texas Enterprise Fund requirements to be performance-based, meaning these companies must first meet their contracted job requirements before any state money is paid out,” she stated. “Companies must also remain and maintain those jobs for an extra year on the contract period. If a company falls short, it will be held accountable to the hardworking people of Texas through provisions that enable us to claw back our grant.” 

Plans for first vaccinations

Texas is preparing to distribute the COVID-19 vaccination to medical staff and other first responders later this month.

“Texas is ready to distribute these vaccines in the coming days,” Gov. Greg Abbott tweeted Sunday, sharing a Wall Street Journal news story about United Airlines operating charter flights to position doses of Pfizer Inc.’s COVID-19 vaccine for quick distribution if the shots are approved by regulators.

Earlier, Abbott and the State Department of Health Services announced their guiding principles of vaccine distribution. Texas will initially allocate vaccines based on the following criteria:

• Protecting health care workers.

• Protecting frontline workers.

• Protecting vulnerable populations who are at greater risk.

• Mitigating health inequities.

• Data-driven allocations using the best available scientific evidence and epidemiology.

• Geographic diversity that considers access in urban and rural communities.

• Transparency with the public.

$1 billion less

Two key Texas funds received about $1 billion less this year because of the economic downturn, state Comptroller Glenn Hegar announced.

The State Highway Fund and the Rainy Day Fund each received more than $1.1 billion in the annual transfer of severance tax money, Hegar said. That’s about $500 million less for each fund than a year ago.

The transfer amounts are based on crude oil and natural gas production tax revenues in excess of 1987 collections. If either tax generates more revenue than the 1987 threshold, an amount equal to 75 percent of the excess is transferred. In November 2014, voters approved a constitutional amendment allocating at least half of the severance taxes to the Rainy Day Fund, with the remainder going to the State Highway Fund for use on non-toll highway construction, maintenance and right-of-way acquisition.

The economic contraction associated with the COVID-19 pandemic and recent volatility in oil prices contributed to the transfer amounts being lower than the $1.66 billion each fund received in fiscal 2020, Hegar said.

“The Rainy Day Fund and the State Highway Fund are critical pieces to ensure Texas’ continued economic strength,” Hegar said. “The State Highway Fund is a key funding source for the transportation infrastructure that is fundamental to our economy, and the importance of maintaining a healthy Rainy Day Fund to help weather unforeseen economic downturns has never been more clear than it has been in recent months.”

With this most recent transfer, the new balance of severance taxes will be about $10.7 billion.

Billion-dollar breakthrough?

Texas A&M researchers announced a breakthrough in fighting agricultural plant diseases.

Kranthi Mandadi, a Texas A&M AgriLife Research scientist and associate professor in Texas A&M’s Department of Plant Pathology and Microbiology, has been working on developing new biological technologies. Mandadi and his team are based at the Texas A&M AgriLife Research and Extension Center in Weslaco.

The diseases cause billions of dollars of damage each year. The U.S. citrus industry alone would save $3 billion a year through control of just one of these diseases — citrus greening. Additionally, the pathogen that causes Pierce’s disease in grapes is the No.1 threat to the $1 billion wine industry in Texas.

The new technologies allow scientists to better study the pathogens and combat them.

Chris Cobler is a board member and past president of the Freedom of Information Foundation of Texas. He welcomes email at ccobler@texaspress.com