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Business as usual with the Texas Enterprise Fund

Raise your hand if this surprises you.

BagOfMoney

In July of 2013, Gov. Rick Perry announced that he had closed another deal. Chevron would build a 50-story tower in downtown Houston next to one of its existing office buildings. The $662 million capital investment was slated to create 1,752 high-paying jobs.

“The state is providing $12 million through the Texas Enterprise Fund to close the deal on this expansion and job creation,” Perry said in a press release at the time.

A Chevron executive added: “our new office building underscores Chevron’s long-term commitment to Houston and Texas.”

Nearly three years later, 1600 Louisiana Street, where the 1.7 million square foot building was supposed to rise in the Houston skyline, remains a grassy lot. The company, it turns out, was not actually required to build its new tower in exchange for drawing state funds.

What’s more, Chevron has announced layoffs of more than 1,500 workers in Houston over the past year, prompting questions about whether the petroleum giant employs fewer area workers than it did before Perry allowed it to tap taxpayer funds.

And yet Chevron remains in full compliance with its Enterprise Fund agreement with the state, according to Gov. Greg Abbott’s office. A close examination of the 14-page contract reveals language so vague that the company does not legally have to deliver on much of what it promised publicly.

Texas has doled out more than half a billion dollars through the Texas Enterprise Fund since 2003, with dozens of firms agreeing to create jobs in Texas in exchange for a subsidy. The fund has long been championed by Perry as a way to reel in businesses that might otherwise land elsewhere. It drew close scrutiny two years ago, in the Republican’s final days in office, after an audit found the fund riddled with weak oversight. Critics honed in on the news that grants were awarded to companies that didn’t formally apply and that state agencies repeatedly failed to check whether companies were adhering to their contracts.

There’s more, but you get the idea. I’ve written plenty about the Texas Enterprise Fund and its various cousins; go search the archives if you want a taste. I’m just going to say now what I said before about tax breaks that the city hands out: There’s a place for this kind of economic incentive, but there ought to be an annual review of each deal, with a public accounting of what was promised, what’s been done, what’s still left to do, and what the timeline is for doing them. For the TEF, there needs to be a better process for deciding how they are granted as well. I don’t think any of this is rocket science, or particularly controversial. Ultimately, it’s up to the voters to elect people who will make that a priority, and then to hold them to that promise. Until that happens, why should anything change?

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