Texas Enterprise Fund has created fewer jobs than governor claims, study finds.

Publication: The Dallas Morning News (Dallas, Texas) (via Knight-Ridder/Tribune Business News)

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COPYRIGHT 2004 The Dallas Morning News

Byline: Dave Michaels

Nov. 23--AUSTIN, Texas - Gov. Rick Perry pressed for creation of the Texas Enterprise Fund nearly two years ago with the promise that it would improve the state's economy, increase tax receipts and generate jobs.

In the last 16 months, he's disbursed $100 million in grants to companies that said they would create thousands of new jobs in Texas. Mr. Perry praises his fund, the largest of its kind in the nation, for spurring 15,000 new positions and luring more than $6 billion in corporate investment to Texas.

Those figures may yet come to pass. But a review of the program by The Dallas Morning News has found that the state paid millions of dollars without securing pledges that any new jobs would be created.

One company promised to create jobs but the state didn't make the promise legally binding. Another will get $5 million for moving its headquarters to Texas even though company officials have said the move had nothing to do with the grant.

To date, 275 jobs have actually surfaced, although Mr. Perry has announced 15 grants to companies that promised to bring economic activity to the state. Texas has signed just five contracts with companies that promise to create 8,500 jobs.

And some grant recipients are allowed to credit themselves for so-called indirect jobs - positions that appear in the economy as a result of innovations made by a company.

"The issue of quantifying [jobs] has always been problematic," said Sen. Steve Ogden, R-Bryan, chairman of the Senate finance committee. He said he would prefer guidelines that emphasize a company's investment in a project rather than jobs.

Mr. Perry calls the fund an unqualified success and plans to seek more money from the Legislature next year. His staff cautions that companies cannot create the jobs immediately.

"If you are not creating jobs in your state, you are not creating the resources that pay the taxes, that in turn pay for the programs that a state is involved in," Mr. Perry said recently. "I happen to think a governor can never sacrifice a long-term view in funding short-term needs."

Recent studies by economist Ray...

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