Texas created lots of jobs; does Gov. Perry deserve the credit?

McClatchy NewspapersAugust 18, 2011 

AUSTIN, Texas — No issue is closer to the heart of Texas Gov. Rick Perry's presidential campaign than his claim to be responsible for the state's impressive record of creating jobs.

Is he? The answer is less black and white than a shade of grey.

In 2002, a major state-sponsored economic study concluded that Texas was lagging behind other states in attracting jobs and business. It called for a series of aggressive steps to make the Lone Star State more competitive.

Over the ensuing years, Texas came roaring back, ultimately leading the nation in job creation and arming Perry with a powerful political message.

Perry's favorite statistic comes from the Federal Reserve Bank of Dallas. It reported that from June 2009 through April 2011, Texas added 237,000 jobs — an eye-popping 48 percent of the 496,000 jobs added nationally in that period, based on data from the Bureau of Labor Statistics.

The new Republican presidential candidate makes Texas' economic success story a centerpiece of his campaign as he vows to "get America working again" and blasts President Barack Obama for the nation's current economic turmoil.

But how much of the Texas jobs record stems from Perry?

"The jockey in the horserace is very important, but which horse he gets on also matters," said economist Terry Clower, director of the Center for Economic Development and Research at the University of North Texas.

Analysts credit a number of powerful economic factors as contributing to Texas' economic success. Among them: Rising oil and natural gas prices benefitted resource-rich Texas; an infusion of Pentagon dollars into state's large array of military installations and defense plants; booming trade from its Gulf ports to Mexico and China; the growth of public-sector jobs; a population boom; and a warm, sunny climate as old as Texas itself. All have contributed to the march of workers into the nation's second-largest state.

Pia Orrenius, a senior economist at the Dallas Fed, told Politifact-Texas, a fact-checking enterprise, that the Texas economy has been roaring since 1990. "Long before Rick Perry ... we were talking about the great Texas economy," she said.

Perry detractors also point out that many employees are low-wage immigrant workers from south of the border.

Nor does every Texan share in the state's good times. About a million Texans are out of work, and about a half-million, many of them young and undereducated, draw minimum wage or less.

While booming communities like Rockwall, 22 miles east of downtown Dallas, draw national attention with a job growth rate approaching 100 percent, the border counties of Cameron and Hidalgo worry about double-digit unemployment.

"Perry talks about the jobs and things, but to a lot of people here who are unemployed, he's talking about some jobs that a lot of people aren't seeing," said Marcus Watson of Fort Worth. He lost his job as a technician for a French-based company nearly three years ago. The 39-year-old father of two teenage boys says he's sent resumes to a "hundred-plus" companies and engages in a "lot of prayer."

Still, for all that, the governor's admirers — and a number of independent economists — say that Perry unquestionably has contributed to the state's economic fortunes by championing low-tax, low-regulatory policies that nurture job growth.

As the state's chief pitchman, say his aides, he is proactive in business recruitment. Perry has sent hundreds of letters to out-of-state corporate leaders touting the state's business-friendly climate and declaring: "Texas wants your business."

Jim Dugan, spokesman for Caterpillar Inc., said the "governor was involved in the process" when the heavy equipment giant decided to build job facilities in two Texas cities, Seguin and Victoria.

The governor's foremost job-getting tool — as well as the most controversial one — is the Texas Enterprise Fund, which attracts businesses through millions of dollars in tax-funded "deal-closer'" grants.

Approved by the legislature in 2003, the fund has invested more than $435.6 million that created 58,382 new jobs and more than $14.6 billion in capital investments, according to the governor's office.

The grants include a $4.2 million award to GE Transportation in May to create a new locomotive manufacturing plant in Fort Worth, which is expected to create 775 high-tech manufacturing jobs and a capital investment of up to $98 million.

Perry and others cite the fund as a sparkplug for economic growth, but critics attack it as ill-conceived and poorly enforced.

Texans for Public Justice, a watchdog group that monitors state spending and campaign donations, reported last year that two-thirds of grant recipients missed their job-creation targets.

Former Houston Mayor Bill White, Perry's Democratic opponent in last year's governor's race, charged that Perry has used the fund to hand out political favors. He called for an audit.

The fund is administered through the governor's office. Grants are approved jointly by the governor, lieutenant governor and House speaker.

A "claw-back" provision allows the state to recoup grant money for projects that don't meet the terms of the contract. According to Texans for Public Justice, Perry's office fined 17 recipients a total of $2.8 million as of June 2010 — 2 percent of the $116 million awarded.

The fund grew out of a comprehensive effort by Perry and lawmakers to address the concerns raised in the 2002 state-sponsored study by prominent Texas economist Ray Perryman of Waco.

Despite an upswing from oil booms, Perryman noted that the state had "fallen behind ... as a result of more aggressive initiatives in other states." Among other things, Perryman said, Texas ranked 37th in new manufacturing locations.

Perryman credits the Texas governor for orchestrating the pro-business policies that helped create the surge of new jobs.

"We're clearly ahead of the pack right now," said the economist. "He has made a tangible difference in making Texas more competitive."

(Dave Montgomery is the Fort Worth Star-Telegram's Austin bureau chief.)

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McClatchy Newspapers 2011

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