Texas
Is Texas losing its edge in the economic development incentives game?
Aerospace manufacturer Bell Textron Inc. revealed last month that it’s ready to invest $429 million in Fort Worth on the condition it wins tax breaks through Texas’ new Jobs, Energy, Technology and Innovation Act.
The acronymic program, pronounced in the incentives business like a Star Wars jedi, kicked in at the start of the year as a replacement for the contentious Chapter 313 tax abatement program.
With the JETI Act, companies can get up to 50% to 75% of property value abated for 10 years if a jobs-bolstering project is located within an opportunity zone. That’s compared to Chapter 313′s 100% abated on school district taxes. The new program also excludes green energy projects.
“The JETI Act is incredibly important in terms of attractiveness for capital-intensive projects moving forward since Texas has a higher property tax burden than a lot of other states,” said Kelley Rendziperis, principal and leader of the economic incentive division of Dallas-based Site Selection Group.
“A lot remains to be seen about how competitive that program will be though,” she said.
Bell, the Fort Worth-based subsidiary of Textron Inc., made it clear in its JETI application to the Texas Comptroller’s office that it is shopping the large-scale advanced manufacturing project in multiple states and that tax abatements are a key component to making it work in Denton County.
Construction could get underway as soon as July on the facility that would be used to produce component parts for aircraft.
It’s the tension between Texas’ high property taxes and the state’s much-discussed business friendliness that becomes a balancing act for those in the economic development game. They consider programs like the JETI Act and the Texas Enterprise Fund vital to compete for major projects bringing jobs and prestigious corporate names to the state.
While the state won Site Selection magazine’s Governor’s Cup distinction for the 12th consecutive year, Texas is facing stiffer competition across the country as other states get more aggressive with incentives. The inter-state rivalry deepened further with the passage of the CHIPS Act, which enticed companies to onshore semiconductor-making operations with tens of billions of dollars in direct subsidies and tax breaks. Contenders have sprung up in the southeast and the Midwest in recent years.
Of the top 94 projects in the U.S. ranked by value of economic incentives tracked by Site Selection Group in its January and February monthly market reports, only two were in Texas. Illinois, Indiana, Iowa, Ohio and Tennessee made frequent appearances.
Site Selection Group, which isn’t affiliated with the magazine, works with companies across the U.S. to identify and secure incentives. It also assists with compliance after incentives are granted.
Rendziperis, along with the company’s CEO and founder King White, watch what companies consider when evaluating where to place an operation and what other states are doing to streamline the incentive process at a national level.
A lot of the office, headquarters and software-development operations that attracted incentives pre-COVID have dissipated significantly post-COVID, White said.
“We’re having to go back in and restructure a lot of those programs we’ve done for clients in Texas, and that’s been a big challenge,” he said.
A report released by Dallas-based commercial real estate services and investment company CBRE Group Inc. showed corporate relocations cooled to 18 through October 2023. That’s compared to the high of 137 in 2021.
Lately, the incentives world has been focused on manufacturing and industrial projects, which is right in line with the hope Texas’ JETI Act will help it tread water alongside its traditional Sunbelt competitors and emerging threats in the Midwest.
Dallas-Fort Worth has an abundance of talent in the manufacturing and industrial space, which is a double-edged sword.
“Now that the metro is so large, it’s become a bit saturated, and it’s about finding those other tertiary markets where you can find specific skill sets,” Rendziperis said.
“There are more cities outside of Texas within the southwest starting to generate their own talent pool,” she said. “That’s more attractive from a site selection perspective because you’re not competing as heavily for jobs.”
Other states also are investing more heavily in establishing mega-sites and even smaller sites ready for development of industrial operations, including data centers, White said.
“In Texas, we don’t have strategies as it relates to that because everything is more developer-controlled, whereas these other states are finding where the companies can buy them,” he said, noting a company wants to own a site with heavy industrial due to the investment.
There are states, such as Kentucky and the Carolinas, that have partnered with utility companies on site readiness, meaning a utility company is actively participating in preemptively preparing attractive sites with adequate infrastructure.
That’s typically a setup you’d find in a state with a more centralized approach to incentives.
Autonomy at a local level in Texas makes sense given the majority of a community’s revenue comes from property and sales taxes. It also means cities have more independence in offering incentives.
States such as Indiana, Ohio and Kentucky have started extending incentives that equate to payroll rebates. While it’s a lucrative benefit, Rendziperis said Texas doesn’t have a state income tax on individuals.
“This is kind of my motto: It’s so important to accurately calculate the cost of doing business in the state before you ever even fold in the value of incentives,” she said.
“So often we’re focused on the value of the incentive package and that’s all we’re looking at, but you have to be looking at the overall picture.”
Texas
Texas needs at least $174 billion to avoid water crisis, state says
AUSTIN (Texas Tribune) — Texas communities will need to spend $174 billion in the next 50 years to avert a severe water crisis, a new state analysis revealed Thursday. That’s more than double the $80 billion projected four years ago, when the Texas Water Development Board last passed a state water plan.
The three-member board presiding over the agency authorized the highly anticipated draft blueprint Thursday, the first administrative step toward adopting the water development board’s plans for the next 50 years. The plan, released every five years, encompasses the projects that 16 regional water planning groups in Texas said are the most urgent, water development board officials said.
The board’s latest estimates come as the state’s water supply faces numerous threats. Growing communities across Texas are scrambling to secure water, keep up with construction costs and cope with a yearslong drought. This week, Corpus Christi officials said the city may be just months away from declaring a water emergency. Meanwhile, other rural cities by the Coastal Bend are rapidly drilling wells to avoid a crisis. Residents in North Texas have also been bracing for groundwater shortages.
In an effort to restrain the crisis, lawmakers last year called an election in which voters approved a $20 billion boost for communities to use on water-related expenses. The water development board’s estimate shows that what lawmakers proposed on the ballot falls dramatically short of the needed cash, experts said.
“What this number tells me at the end of the day is if we don’t get serious about (funding water projects), there are going to be serious consequences for Texas,” said Perry Fowler, executive director of the Texas Water Infrastructure Network. “Even with the billion-dollar-a-year plan kicking in, it’s not going to be enough to offset the costs of the projects that are going to have to be executed.”
The new estimate accounts for 3,000 projects, from regional infrastructure upgrades to smaller endeavors such as drilling new water wells. Texas’ water supplies are expected to drop by roughly 10% between 2030 and 2080, according to the water plan. In that same time frame, the maximum amount of water communities can draw is also expected to decline by 9%.
The 80-page plan notes approximately 6,700 recommended strategies that would add water to the state’s dwindling portfolio. The recommendations — which are not accounted for in the cost — include developing new supplies from aquifer storage and recovery, brackish groundwater, desalination and recycled water. It also calls for water conservation.
The report suggested that if Texas does not implement the plans and recommendations, the state is one severe drought away from an estimated $91 billion in economic damages in 2030.
The state’s plan attributes a variety of reasons for the bigger price tag, such as higher costs of construction due to inflation, impacts of the COVID-19 pandemic on supply chains, and a growing backlog of water supply projects.
“There’s a plan that can meet our needs,” said Matt Nelson, deputy executive administrator for the Office of Planning at the water development board, adding that they take their cues from the regional planning groups. “These are local projects that folks need to implement; they’re needed regardless of how they’re funded. It’s important to remember these are not top-down projects or state projects.”
Experts told The Texas Tribune that the board’s estimate is only a fraction of what Texas communities will need to ensure they have water in 50 years’ time, saying growth and development are outpacing the state’s ability to keep up.
“This is a bigger water plan in terms of volume strategies and capital costs compared to anything we’ve ever seen before,” said Jeremy Mazur, the director of infrastructure and natural resources policy at think tank Texas 2036.
Mazur suggested that the $174 billion only covers water supply projects and does not account for updating aging infrastructure, adding that the actual price could amount to a quarter of a trillion dollars.
“There’s a substantial magnitude with regard to the capital investment needed to both fix our aging and current systems and potentially develop the water infrastructure, water supply projects that we need.“
The report largely confirmed what many water experts have warned regarding threats to the state’s water supply, said Sarah Kirkle, director of policy at the Texas Water Association.
“Population growth, extreme weather, and economic development needs are all increasing demands on our infrastructure, and the state is going to need more water, sooner,” Kirkle said. “This is all while water projects are becoming more costly and complex because the easiest and cheapest local projects have already been developed.”
Fowler, with the infrastructure network, said he expects the Texas Legislature to take up the issue next year, when lawmakers meet for the 90th legislative session. He said the state should take a bigger role in ensuring that communities can afford their respective water projects.
“It’s going to have to be a top-down priority, there’s no way around it,” he said. “The challenges are so immense that it’s going to take all hands on deck.”
Texas residents have until the end of May to comment on the proposal. Water development board officials must adopt it by January 2027.
Alejandra Martinez contributed to this story.
This article originally appeared in The Texas Tribune at www.texastribune.org. The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans – and engages with them – about public policy, politics, government and statewide issues.
Texas
Co‑worker confesses to killing missing North Texas man and stealing his car, police say
A North Texas man reported missing earlier this week was found dead Friday, and police say a co‑worker has confessed to fatally shooting him and stealing his car.
The suspect, Gregory D. Lewis, 34, remains in custody and faces a forthcoming capital murder charge, according to the Fort Worth Police Department.
Lewis is accused of killing 31‑year‑old Thomas King, who had been last seen in his Taco Casa work uniform. King was reported missing on Tuesday after failing to return home Monday from the fast‑food restaurant in the 1100 block of Bridgewood Drive.
Car found at Arlington motel
Police said King’s car was found at the Quality Inn on I‑20 in Arlington, and surveillance video showed Lewis arriving in King’s vehicle shortly after King left work.
Detectives identified the man in the video and arrested him on unrelated charges.
Body discovered on Fort Worth’s East Side
King’s body was located on Friday in an open field on Fort Worth’s East Side, authorities said.
According to police, Lewis confessed to shooting the victim and stealing his car.
Medical examiner review pending
The Tarrant County Medical Examiner will determine the cause of death.
CBS News Texas has reached out to Taco Casa for comment.
Texas
Exclusive | Mexican mayor urged relatives in US to vote for Texas Dem for Congress who would ‘take care’ of their city
WASHINGTON — A Mexican mayor earlier this month urged her constituents to get their relatives in Texas to vote for House Democratic candidate Bobby Pulido because he would “take care” of their city if elected to Congress.
“We need to get out the vote for him,” said Patricia Frinee Cantú Garza, mayor of General Bravo in Nuevo León, less than two hours from the US border, in a recent Spanish-speaking Facebook reel,which The Post reviewed and translated.
“Talk to your families in the United States. Make sure they go vote,” Garza added, noting that she would be presenting the keys to the city to Pulido, a two-time Latin Grammy winner, on April 3.
“When he becomes a congressman,” she also said, “we want him to take care of Bravo.”
The city ceremony celebrating Pulido in General Bravo never received enough funding and was cancelled, the Mexican outlet El Norte reported.
Pulido has headlined concerts in General Bravo as recently as November 2023. Local officials promoted the show and the current mayor and her husband, then-mayor Edgar Cantu Fernandez, appeared.
“Bobby doesn’t know the mayor and has never met her,” a Pulido campaign spokesperson said in a statement. “He declined the invitation, didn’t attend the event, and isn’t responsible for unsolicited comments made by other people.”
Bradley Smith, a former chairman of the Federal Election Commission, said the statements wouldn’t pose legal or ethical issues for Pulido — but that the remarks may have a political cost, given the focus on foreign involvement in US elections in recent years.
“If you were making financial contributions, that would be a different thing, but just to exhort people to vote,” Smith said, “I don’t think that’s going to be a problem for them.”
Jessica Furst Johnson, a partner at the Republican-aligned campaign finance and election law firm Lex Politica, noted that event appeared to function as an in-kind contribution to Pulido’s campaign but it would be difficult to determine without “more details.”
Congressional Republicans have thus far failed to pass a bill this session aimed at beefing up identification requirements for voters when registering, though many have said laws as currently written are too lax and could lead to non-citizens casting ballots.
State investigations and audits have shown in recent years that thousands of non-citizens ended up being registered, but few have ever illegally voted. Those who have are federally prosecuted.
Pulido is challenging incumbent GOP Rep. Monica De La Cruz in the Texas district this November and has faced questions from the press about his ties to Mexico, where he has said he maintains a home for parts of the year.
The Latino music star admitted to splitting time with his family between there and Texas just two years before launching his campaign, telling a YouTube show in a 2023 interview that he’s a “summer Mexican” but “winter Texan.”
“We live on the border,” he has also said. “My wife and I have a house in Mexico. So, we travel there, and we spend time over there.”
There was no indication of a current mortgage on a property either there or in the US, according to financial disclosures that Pulido filed April 15 with the House. Those filings also revealed he holds a checking account at a Mexican bank.
“Bobby lives in his family home in Edinburg, Texas, where he was born, raised, and is raising his own family,” the Pulido campaign rep noted. “He is in complete compliance with all House disclosure rules — the property you are referencing is not his primary residence so is not required to be listed.”
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