The high cost of business incentives (especially in Texas)

This series in the New York Times over the weekend is most searing report ever on how much "doin' bidness" is costing us. From Part I...

A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains. 

The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid. 

[...]

A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them. Many of the officials said they feared that companies would move jobs overseas if they did not get subsidies in the United States. 

Over the years, corporations have increasingly exploited that fear, creating a high-stakes bazaar where they pit local officials against one another to get the most lucrative packages. States compete with other states, cities compete with surrounding suburbs, and even small towns have entered the race with the goal of defeating their neighbors. 

Which state pays the most incentives and has the least to show for it? Why, Rick Perry's Texas.

Under Mr. Perry, Texas gives out more of the incentives than any other state, around $19 billion a year, an examination by The New York Times has found. Texas justifies its largess by pointing out that it is home to half of all the private sector jobs created over the last decade nationwide. As the invitation to the fund-raiser boasted: “Texas leads the nation in job creation.”

Yet the raw numbers mask a more complicated reality behind the flood of incentives, the examination shows, and raise questions about who benefits more, the businesses or the people of Texas. 

Along with the huge job growth, the state has the third-highest proportion of hourly jobs paying at or below minimum wage. And despite its low level of unemployment, Texas has the 11th-highest poverty rate among states. 

“While economic development is the mantra of most officials, there’s a question of when does economic development end and corporate welfare begin,” said Dale Craymer, the president of the Texas Taxpayers and Research Association, a group supported by business that favors incentives programs.

$19 billion annually. That is more than enough to solve the state's budget woes. 

Eliminating these tax breaks would mean that the Texas legislature would not have to gut education, public health programs like Medicaid, and all the rest. All they would have to do is just ask businesses to pay what they are supposed to pay.

America -- and Texas -- is NOT going broke. We're being robbed.

Update: This diary by Daily Kossack DRo has more.

The Weekly Wrangle

The Texas Progressive Alliance is making a list and checking it twice as it brings you this week's roundup.

Off the Kuff discredits the myth that straight ticket voting was the key to judicial races in Harris County.

People who think government doesn't work probably aren't the right people to elect to government posts. WCNews at Eye on Williamson shows what happens when people who hate government are put in charge of it.

Kyle Janek, Rick Perry's recent appointee to head the Texas Health and Human Services Commission, refuses to believe the 2010 census figures that show Texas as having the highest number of uninsured adults in the nation. PDiddie at Brains and Eggs is almost without words about the Reality Derangement Syndrome demonstrated by Republicans (particularly Texas Republicans).  

CouldBeTrue of South Texas Chisme is not surprised that John Boehner picked a Texas dunderhead to lead the House Science and Technology committee: climate change skeptic and all around idiot Lamar Smith.

Neil at Texas Liberal says that 2014 Republican lieutenant governor candidate Jerry Patterson is prepared to shoot... even though Mr. Patterson is not very clear about his intended target.

TX health commissioner doesn't believe census on high number of uninsured

The virulent and nasty strain of Republican Reality Derangement Syndrome, most prevalent in Texas, shows no sign of easing. Reality Check on Kyle Janek:

The new executive commissioner of Texas' Health and Human Services Department—the social services behemoth that's currently in the process of building a whole new Texas Women's Health Program (WHP) so it can exclude Planned Parenthood from providing contraceptives and cancer screenings to low-income Texans—has some interesting views on the condition of public health care in his state. And by "interesting," I mean shocking. I mean shockingly ignorant. Astounding, even.

Dr. Kyle Janek is an anesthesiologist by training, but for the last 18 years has served as a Republican in the Texas Legislature and as a lobbyist for various medical organizations. Governor Rick Perry appointed him as executive commissioner of the Texas HHSC on September 1st. You might expect that in 18 years of being plugged into Texas politics and state health policy, he'd have a decent grasp on the issues facing Texans.

You'd be wrong. Because Kyle Janek doesn't believe—despite credible, widely accepted evidence to the contrary—that one of Texas' most pressing health problems, its high number of uninsured adults, is real. He doesn't believe that more than a quarter of Texans are uninsured, as estimated by the U.S. Census Bureau. He told a Texas Tribune reporter in early October that he believed that number to be "inflated," and then reiterated his point in an extended interview with Tribune editor Evan Smith on October 31st. (Through his press representatives, he refused an interview with RH Reality Check.) Here's his most recent take via the Tribune:

"It's not that I don't believe those numbers. I don't believe the reasoning for those numbers."

Janek used to represent me in the Texas Senate, and at that time was widely reputed to be one of the moderates. So something has obviously changed; either the accuracy of the political reporting or Janek's interpretations, uninfluenced by a desire for re-election. I don't really care which it happens to be, for the record.

Janek's problem: he said the Census Bureau only takes a "snapshot" by asking people if they're uninsured, and doesn't ask them if they had insurance in the past or if they think they have a job lined up with insurance in the future. Janek must not be aware that for nearly 25 years, the Census Bureau's "snapshot" has shown practically the same thing: since 1987, Texas repeatedly has one of the highest, or the very highest, number of uninsured adults in the country. That rate has not been below 1987's 23 percent; it peaked at 26.8 percent in 2009 and is currently estimated at 26.2 percent.

That's a remarkably consistent snapshot of something that Janek seems to believe changes for millions of people by the day. Janek says he isn't sure why Texas "is different" when it comes to health care, but he told the Tribune it could be because the weather here is nice.

"Do we have so many people that are temporarily uninsured? Or is it the general climate of better weather and glorious place to live? Folks come here, and that attracts more folks with health care needs or disabilities?" he wondered during the interview. Surely our high uninsured numbers couldn't be due to the fact that Texas jobs generally don't provide health insurance, that Medicaid in the state is limited, that insurance rates are unregulated or that Texas has a large immigrant population, as the Washington Post reported last year. No, it's probably just the purty weather.

This is just embarrassing. For Janek, for Rick Perry (who appointed him), and for all of the rest of us in Texas.

So there's a lot of different ways we could go with this news.

One would be that even when you think Rick Perry has appointed someone of some repute to a statewide  post, it's bound to turn out to be another epic fail. Keep in mind that just in the past few months, the governor appointed Michael Williams to head the Texas Education Commission and his own chief of staff to the state Supreme Court, clearing a path for yet another toady. (There's a reason why a person is willing to take a pay cut from $312,000 a year to $175,000, and it isn't about the money.) And now the health commissioner, just by opening his yap, looks like the worst of this lot.

Another path -- well-worn -- would take us down Lamentation Alley, where we moan again about the curious conservative belief system and how it is destroying everything that used to be great about Texas. I'll pass on another serving of that.

Let's just consider what this entrenched patronage system is providing us, all the way down the line. The advance, to understand the next excerpt -- that you should read in the first link at the top -- is that Janek believes the solution to the problem (that he doesn't think actually exists) is to fund more medical schools in Texas.

Why does Janek think that Texas legislators, county commissioners and other politicos are suddenly ready to funnel millions, probably billions, of dollars into medical schools? 

Perhaps because he's hired a conservative think-tanker to help make that happen. Her name is Mary Katherine Stout, and for $150,000 per year, the former Perry staffer, Wal-Mart defender and far-right Texas Public Policy Foundation economics "expert" will act as a "special advisor," "involved in a number of policy and planning issues," according to HHSC spokesperson Stephanie Goodman. Goodman told RH Reality Check that Stout will be "looking at ways [Texas HHSC] can work with medical schools to support their efforts to make sure Texas has enough health professionals."

In the past, Stout has particularly focused her efforts on criticizing Medicaid and especially CHIP, the popular children's Medicaid program, which she has said is rife with luxury car-driving freeloaders and should be closed to people who are verily rolling in cash and furs, like "those making as much as $40,000 annually for a family of four." Stout's coldness is unusual even for Texas right-wingers, and her cruel preoccupation with making sure as few Texas children as possible receive needed aid borders on the bizarre. To that end, this was her 2007 proposal for fighting "The Left" in the National Review:

Perhaps we should fight their strategy with our own campaign to tell stories of success, of people working hard and making good decisions for their family, of people who made something out of nothing, or who turned something into more. Yes, send me your stories of success, of personal responsibility, and of government’s depredations on a family trying to make ends meet.

These are the words of a "special advisor" on Texas public health care policy, who'll be whispering in the ear of a man who believes the state has "inflated" uninsured numbers because hey, poor people can always go walk in and get some open heart surgery at a public hospital or amorphous medical school of dubious funding origin.

This is one of those times when I wish Texas really was a whole 'nother country, for entirely different reasons than the secession petition-signers.

Sunday Funnies

Susan Rice and Keystone XL

I have defended Amb. Rice against the scurrilous personal attacks leveled against her by John McCain, Lindsay Graham, et.al., but that's all over now.

The shoulders on which the Keystone XL pipeline decision may fall happens to have a half-million dollar stake in the game. Secretary of State hopeful and current U.S. Ambassador to the UN, Susan E. Rice reportedly owns between $300,000 and $600,000 of TransCanada stock.

It gets worse: she is a massive investor in several of the various Canadian tar sands players.

(Rice) holds significant investments in more than a dozen Canadian oil companies and banks that would stand to benefit from expansion of the North American tar sands industry and construction of the proposed $7 billion Keystone XL pipeline.

[...]

(A)ccording to financial disclosure reports, about a third of Rice’s personal net worth is tied up in oil producers, pipeline operators, and related energy industries north of the 49th parallel -- including companies with poor environmental and safety records on both U.S. and Canadian soil. Rice and her husband own at least $1.25 million worth of stock in four of Canada’s eight leading oil producers, as ranked by Forbes magazine. That includes Enbridge, which spilled more than a million gallons of toxic bitumen into Michigan’s Kalamazoo River in 2010 -- the largest inland oil spill in U.S. history.

Rice also has smaller stakes in several other big Canadian energy firms, as well as the country’s transportation companies and coal-fired utilities. Another 20 percent or so of her personal wealth is derived from investments in five Canadian banks. These are some of the institutions that provide loans and financial backing to TransCanada and its competitors for tar sands extraction and major infrastructure projects, such as Keystone XL and Enbridge’s proposed Northern Gateway pipeline, which would stretch 700 miles from Alberta to the Canadian coast.

This is the sort of thing that the SEC usually refers to as 'insider trading', which is illegal. Usually.

Not only does Rice not deserve a promotion, she probably ought to go ahead and resign from her post as UN ambassador and "retire" from politics. My guess is she still has a bright and lucrative future as an oil industry lobbyist.

Greg Abbott: Hurry up with our VRA challenge

Michael Li:

Lawyers for the Justice Department and intervenors in the Texas voter ID case told the court yesterday that the court should put off consideration of Texas’ claim that section 5 of the Voting Rights Act is unconstitutional until the Supreme Court decides the pending Shelby County v. Holder case next year.

That case involves a challenge to the statute by Shelby County, Alabama, contending that Congress acted without sufficient evidence in 2006 in extending section 5 coverage for another 25 years and that the formula for determining what states and sub-divisions are subject to section 5 is outdated.

Money shot:

The State of Texas disagreed and told the court that it should go ahead and decide the constitutional question being raised in the Texas case or otherwise its voter ID law “will be stuck in limbo until the end of the current Supreme Court term.” 

So it would seem to me that the Republicans in the Lege would be working on a revised Voter ID bill for 2013 -- a less onerous one, that comes closer to passing legal muster -- as a Plan B to an adverse ruling, except that the last sentence in the second excerpt suggests that the conservatives have all of their eggs rotting in one basket. Perhaps the timeline for a decision from the court is such that a Plan B could still be pulled out of a drawer in the coming session.

In a response to this question on his FB page, Li states: "there does not seem to be any major move to revisit the law".

This kind of 'all in' gamble by Greg Abbott, considering his track record with the feds, would surprise me... if I weren't already convinced of his stupidity. Then again, maybe it's the GOP legislators who are dumb. And the question becomes moot if we learn in the coming weeks that they are quietly working on something in case they lose in court.

But if Li is correct, and the court either denies Abbott's request or accepts it and rules against the state later, then without some alternative legislation offered in the coming session... Voter ID would be dead until 2015.

That would have to be the most favorable outcome for voting rights and democracy one could hope for. As always when it comes to the judges, the lawyers, the OAG, and the GOP in the Lege, we'll have to wait and see what develops.