Politico revisits a familiar subject.
California corndogs are the best
Since as early as February of last year and as recently as April of this one, Perry has made eight trips to six different states, all of which have one very particular thing in common: They’re run by Democratic governors. Perry has used his visits to hammer on a consistent theme: Texas is a great state for business; the state he’s currently in is not; so wouldn’t it make sense then for all those companies that aren’t currently located in the Lone Star State to correct their error? Earlier this month, Perry made plain the politics behind his accumulated frequent-flier miles. “Blue-state governors need to be looking over their shoulder,” he told a Fox News panel.
Perry’s focused national tour is built around a message that’s tailor made for a presidential campaign whose central issue will likely be a lagging economy. The “Texas miracle,” the idea that Perry’s policies produced job growth in the worst climate since the Great Depression, first emerged in his initial failed campaign and has lived on ever since, buoyed by the fact that the state’s unemployment rate remains below the national average. But as any number of progressive-minded opponents will tell you, that “miracle” is most likely due in large part to the state’s wealth of fossil fuels. Hardly an advantage Perry can claim credit for. But tempting CEOs to relocate southward? For that he’ll gladly take an attaboy.
Poaching companies is nothing new. States have been bad-mouthing and out-bidding each other for decades in the hopes of luring more business, often with little to show for it. But according to Greg Leroy, the executive director of Good Jobs First, a D.C.-based non-profit devoted to exposing what it considers the folly of government subsidies often given in the name of attracting companies, Perry’s campaign stands on its own. “I’ve been covering this for 30 years and there’s no precedent for what he’s doing,” says Leroy. “Nobody’s been as aggressive. Nobody’s done it as personally. He’s really taking it to a new low.”
[…]
The ideological fuel powering Perry’s trips out of state says that, unlike the weather, that vague term known as a “business climate” can be engineered, and that no one’s done a better job of parting the clouds than Texas. But Leroy and nearly a century’s worth of data suggest otherwise. As does the most recent pelt in Perry’s poaching tour, which also happens to be the biggest such prize in his political career.
[…]
Then, in late April, Perry got the big score that seemed to justify all his travels when Toyota announced it had selected Plano, a Dallas suburb, as the home of its new North American headquarters. “Toyota understands that Texas’ employer-friendly combination of low taxes, fair courts, smart regulations and world-class workforce can help businesses of any size succeed and thrive,” a glowing Perry said the day the announcement was made.
Toyota was a coup for two specific and related reasons. It meant 3,000 new jobs for Texas and 3,000 fewer for California, the state where Perry’s trip had begun and Exhibit A in his campaign against what he sees as business-killing taxation and regulation. It seemed the epitome of a red state offering safe harbor to a beleaguered company that had finally had enough abuse at the hands of a grubby-handed blue state. Yet just a few days after the announcement, Toyota began quietly offering a counter-narrative.
In an extended interview with the Los Angeles Times, Toyota’s North American chief executive Jim Lentz gave a more nuanced explanation for why the company left California. The true reason for his company’s move, Lentz explained, came down to something much simpler: not sending the wrong signal to his employees. Toyota, Lentz said, wanted to consolidate management that was spread out over three states. Choosing California was never an option because it was already the home of Toyota’s sales and marketing and Lentz said that he didn’t want to give the impression to the rest of the company that “sales was taking over.”
“It may seem like a juicy story to have this confrontation between California and Texas,” Lentz told the Times, “But that was not the case.”
That left four candidates: Plano, Charlotte, Denver and Atlanta. In an op-ed he published a week later in the Dallas Morning News, Lentz mentioned that low taxes were part of a “wide range of criteria” that led him and his company to choose Texas, but he also made a point to mention that the decision was a matter of “simple geography.” Greater Dallas is in the Central Time Zone, has a nearby airport with direct flights to Japan and sits close to the multinational’s large American base of manufacturing. In other words, Texas was not, as Perry would have it, the most desirable choice because of taxes, regulation or the $40 million in subsidies it offered as a cherry on top. Instead, Toyota picked Texas in large part because of the one enormous advantage the state has enjoyed ever since the signing of the Treaty of Guadalupe-Hidalgo: It sits smack in the middle of the country.
Yes, the Toyota story started falling apart even before the ink was dry on Perry’s self-congratulatory press release. I’m glad Politico followed up on that angle – and there’s still more to it, which we’ll get to in a minute – but as has been the case with all of these stories, no one ever seems to ask the question: where are the jobs Perry has been so busy trying to poach? Toyota was looking like the first real coup, before it all came crashing down in a landslide of boring corporate minutiae, but what else is there? I have long been of the belief that the answer is basically “nothing”, but it would be nice to have some newsgathering organization try to figure it out for themselves.
As for the other angle on Toyota, here’s the Observer.
Rick Perry’s office refuses to release any information about the $40 million it’s offering Toyota to relocate to Texas, despite providing the Observer with similar information last year for a $12 million grant to Chevron.
The Observer and the Houston Chronicle both filed open records requests with the governor’s office after Perry announced in April the $40 million incentive grant to Toyota from the Texas Enterprise Fund. The governor’s office promotes the Enterprise Fund as a “deal-closing” program that helps bring jobs to Texas. But in some cases evidence suggests that the fund does little but line the pockets of companies planning to move to Texas anyway. For example, the Observer reported last year Chevron already had plans to develop an office tower in downtown Houston, provided scant justification that it was considering other locations in its application and told the governor’s office that it planned to use the $12 million grant to pay for employee relocation perks.
It would be interesting to know if something similar happened with the Toyota grant. Especially since company executives have said the $40 million Texas Enterprise Fund grant had little to do with the relocation from California to Plano.
I can’t be the only one who thinks that if there was something in this information that made Rick Perry look good he’d have released it by now, right?