Editorials

Abbott scuttles a state incentive fund

When it comes to red-meat conservative issues like taxes and border security, it’s fair to assume Gov. Greg Abbott will not differ greatly from his predecessor.

But, while Abbott’s tenure may not prompt a sea change in public policy, the new governor is already illustrating his willingness to buck the status quo.

On Thursday, he announced his plan to scuttle the Emerging Technology Fund, a pricey incentive program started by Gov. Rick Perry.

If the Legislature agrees, half of the fund’s $136 million balance would be allotted to the Governor’s University Research Initiative to be used to recruit Nobel laureates and distinguished faculty; the other half would go into to the Texas Enterprise Fund.

The ETF — primarily designed to attract and retain start-ups and tech firms — can claim moderate success. It has awarded more than $400 million to support scores of start-ups since its creation in 2005.

But it also drew criticism for poor management, transparency and oversight. In 2011, the State Auditor found the fund had lost millions of taxpayer dollars on poor investments and called for sweeping changes.

An interim report issued in January by the House Select Committee formed to review incentive programs was less critical but still recommended that the program be restructured to improve its functionality.

Ending the program altogether is probably the best solution.

A secondary goal of the ETF was to help recruit talented researchers to Texas universities, and according to the Select Committee’s report, it brought more than 60 such academics to Texas.

It’s fitting that Abbott’s plan preserves this element of the program, particularly given his commitment to improving higher education.

Handing half of the remaining cash to the Enterprise Fund is more circumspect, particularly given that program’s equally lamentable record of troubling audits and mismanagement.

Abbott has indicated his desire to reform all state incentive funds. One down, several to go.

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