01.27.10

Perry’s corporate welfare not paying off for Texas

Posted in Around The State, Taxes, The Economy at 7:00 am by wcnews

Via a new report from Texans for Public Justice (TPJ), Governor Perry’s Pet Jobs Program Suffers Its Own Recession.

Many projects receiving millions of dollars in taxpayer subsidies through Governor Rick Perry’s high-profile Texas Enterprise Fund (TEF) failed to meet their contractual job-creation targets as the recession took hold in 2008.

An analysis of 45 TEF projects that received a total of $363 million in tax subsidies finds that a growing number of TEF recipients defaulted on their job-creation pledges in 2008, with even more defaults expected for 2009.

Key findings of TPJ’s analysis reveal:

* The Governor’s Office has awarded $363 million to 45 TEF recipients to create or maintain 47,735 jobs. These projects claimed 31,319 jobs in compliance reports covering 2008.

* Just 13 of the 45 job-related projects reviewed were performing well.

*As of October 2009 the Governor has penalized 11 TEF grantees for defaulting on their job creation commitments. These penalties, totaling $647,100, amount to just 1 percent of the $64 million in TEF funding that they received.

* The Governor has imposed the “death penalty” on just two TEF projects despite the fact that many other TEF recipients have qualified for termination.

* In February 2009, Perry declared that the TEF program had created 54,000 jobs since 2003. More than one-third of these jobs are pledges that have yet to materialize.

Read the full report, Recession Pounds Perry’s Jobs Fund. Which includes this nugget:

Unemployment Insurance Has Funded the Enterprise Fund

Texas’ Unemployment Compensation Trust Fund is running out of money to pay benefits to all the state’s laid-off workers, including those laid off by companies subsidized by the Texas Enterprise Fund. The irony here is that the state unemployment fund has transferred $161.5 million to Governor Perry’s job fund since the legislature authorized such funding in 2005. The Texas Workforce Commission recently announced that the unemployment-insurance taxes paid by most employers will almost triple in 2010 to cover shortfalls. In other funding, the legislature has appropriated $577 million for TEF since 2003 (though it snubbed Governor Perry’s request for $261 million more in 2009).

Oh the joys of corporate welfare.

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