Audit of Texas Enterprise Fund finds bipartisan favor

Posted Thursday, Apr. 11, 2013  comments  Print Reprints
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Was a Texas Senate committee's bipartisan enthusiasm for auditing the Texas Enterprise Fund a bipartisan dig at Gov. Rick Perry, the fund's biggest champion?

Even if it were, would that make the bill a bad idea?

Not from a taxpayer-responsive, good-government standpoint.

Only the five senators who voted SB1390 out of the Senate Economic Development Committee on Wednesday know in their hearts what their political motivations were. But it's notable that the group included more Republicans than Democrats.

Democrats Wendy Davis of Fort Worth, the bill sponsor, and Kirk Watson of Austin were joined by Republicans Bob Deuell of Greenville (the committee chairman), Brian Birdwell of Granbury and Kevin Eltife of Tyler.

Republicans Kelly Hancock of North Richland Hills and Troy Fraser of Horseshoe Bay missed the hearing.

SB1390 would require the state auditor to "determine the efficiency and effectiveness" of the multimillion-dollar job-creation fund and make sure it has adequate financial controls to maintain accountability for the public money it spends luring businesses to the state.

The Legislative Budget Board estimated the cost of the audit at $537,688.

Created in 2003, the fund has invested more than $487 million in 106 projects that have committed to create 66,094 jobs, but it has never been evaluated through an external audit.

The pool of money is a favorite Perry tool for enticing companies to Texas. They receive grants and agree to meet hiring goals within a specific timeframe. If they don't comply and terms aren't amended, funds must be returned.

In a 2013 report to the Legislature covering the last biennium, the governor's office said the fund "gives Texas the competitive edge" in attracting businesses and helping those already in the state expand instead of looking to move. (bit.ly/4quRC9)

The governor's office does keep details about grants made to date on a website about the fund. According to the legislative report, grants made from January 2011 through December 2012 included $194,000 for 3M Co. in Angleton, $21 million for Apple in Austin and $550,000 for plastics recycler Coll Materials in Waco.

In Fort Worth, $450,000 went to Ferris Manufacturing, a medical supply company; $4.2 million to GE Transportation's locomotive assembly facility; and $1.2 million to investment firm TD Ameritrade.

The report also includes information about grants that were terminated.

The legislation would provide for a comprehensive, independent analysis so taxpayers can be sure awards have followed proper procedures, recipients have complied with their contracts and money has been recouped when projects haven't panned out as promised.

In a news release, Davis called it "critical that we put the fund under a microscope to ensure that every penny of these grants is being best used to attract good-paying jobs to Texas."

The enterprise fund has found critics on the political left and right, with some questioning whether it's a mechanism to reward cronies and others calling it wasteful corporate welfare. Without casting aspersions, Deuell has been quoted as saying lawmakers and the public need to be satisfied that the money's being spent wisely.

That worthy goal should make this measure an easy vote in the full Senate and the House.

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