In 1993, the Texas Legislature created a program called “Smart Jobs” to provide incentives to companies to train high-tech workers for the emerging jobs of the future. It was a great idea and many companies made excellent use of it. Smart Jobs resulted in some significant investments in Texas that are still paying dividends. Over time, however, lawmakers (no doubt with the best of intentions) made it available to a broad range of jobs (most of which weren’t too “smart”), burdened it with a lot of new and cumbersome regulations, required certain geographic distribution of the funds, and even used some of the funds to retrain prisoners.
All of these things may have served a worthwhile purpose, but they destroyed the whole concept of encouraging “smart” jobs. Given all of these factors and some serious administrative problems, the program was ultimately cancelled in 2001. The mere mention of “Smart Jobs” still brings groans in the halls of our majestic Capitol. In truth, the concept didn’t fail; it was simply changed beyond recognition.
I bring up this unpleasant chapter from our recent past only because I see ominous signs of history repeating itself a decade later. In 2003, the legislature created the Texas Enterprise Fund as a vehicle to restore our competitiveness for major corporate locations. In the preceding eight years, we had fallen from the unchallenged national leader in economic development to one of the also-rans in the lower middle of the pack.
By any reasonable standard, the Enterprise Fund has been a rousing success. We have obtained more major locations than any other state, and have seen thousands of jobs and billions of dollars in investment come to Texas that otherwise would have gone elsewhere. Many of these projects serve to keep Texas at the cutting edge of key emerging industries. Others have created large numbers of much-needed jobs. Some have occurred in conjunction with university research and teaching programs, thus creating even greater long-term synergies and benefits. The commitment of public resources will be returned dozens of times over. If there ever was a winner, this is it.
Despite this rousing start, there is a rising and at times vitriolic echo of criticism. Some want to compel a certain geographic distribution of the funds; others want more rules, regulations, and oversight. Sound familiar? The whole idea is to give the state the capacity to deploy resources where they are most needed, and to do so in innovative ways. By handcuffing the Texas Enterprise Fund, you run the distinct risk of destroying it. If we are not careful, we will kill our golden goose.
Quite frankly, if there is any valid criticism of the program, it is just the opposite. Economic development professionals who are out “where the rubber meets the road” feel that the Fund is too restrictive and doesn’t offer sufficient flexibility. Corporations who have received grants have comments about the tedious and cumbersome nature of the contracting process. What takes days (and, in some cases, hours) in other states still takes months in Texas. Nonetheless, you can’t argue with success, and it is certainly getting the job done.
I am often in the middle of these projects, and I can assure you the public interest is well protected. Every award requires the approval of the Governor, the Lieutenant Governor, and the Speaker. In case you haven’t noticed, these folks are not exactly spendthrifts, and they certainly don’t always agree on things. Each of them has experienced staff assigned to review and evaluate applications, and the process is very rigorous and analytical. To date, less than 20% of the proposals have been approved and many of those have had their initial request reduced. In addition, there are hundreds of potential applicants who don’t apply because people like me let them know they simply don’t meet the very high standards. There are plenty of safeguards in the system.
In short, the Texas Enterprise Fund is an outstanding initiative that has exceeded even my expectations (it was the most important recommendation for the statewide economic development plan I prepared in 2003). It has been the primary factor transforming the economic prosperity of the state in dramatic ways. In fact, it is highly unusual to see a public sector initiative work so well and bring such enormous benefits to taxpayers and citizens. The worst thing we could possibly do is stifle the very characteristics that make it work so well. The Enterprise Fund ain’t broke; don’t fix it!