With eight months left in office, Gov. Rick Perry is away from Texas almost as much as he’s home — hitting the road hard to tout his state as America’s best place to do business.
The Republican isn’t shy about job poaching in other states, and scored a big win when Toyota announced this week it was moving its U.S. headquarters from California to suburban Dallas. That the world’s largest automaker is leaving the nation’s leading blue state for its No. 1 red one is a victory Perry can crow about as he gears up for an expected second White House run.
“It’s a walk-off home run for Perry,” said Republican political strategist Mark McKinnon, a top adviser in the presidential campaigns of John McCain and George W. Bush. “His jobs and economy narrative is now complete and real.”
Rebounding from his gaffe-marred presidential run in 2012, Perry is doubling down on the argument that his low-tax, low-regulation approach as governor since 2000 has been the driving force behind Texas’ tops-in-the-nation job growth. He was in New York last week, trying to lure top employers with the prospect of higher corporate profits.
But the pitch has its downside, as some rivals two years ago pointed out — including Texas’ having a disproportionate number of low-wage jobs and leading the nation in the rate of residents without health insurance at about 1 in 4.
Also unmentioned was that some Democratic-led states have experienced hot economies even with more progressive policies on taxes and social programs. Minnesota’s unemployment rate in March was 4.8 percent compared to Texas’ 5.5 percent, according to the Bureau of Labor Statistics. Maryland, another prime Perry target, had a 5.6 percent unemployment rate.
Nonetheless, Perry has intensified his employer recruitment efforts in states with Democratic governors in the past 14 months, even appearing in radio and television ads poking fun at “big-government” states. In addition to New York, other such missions have taken Perry to Connecticut, Maryland, Missouri and Illinois.
He made two such trips to California — though Toyota didn’t mention recruitment by Perry as prompting its move. Sweetening the deal was an incentive fund overseen by Perry’s office offering Toyota a whopping $40 million for the roughly 4,000 jobs Texas is gaining.
Perry has also recently been in England and Israel, bragging about Texas’ economic prowess, and TexasOne, the public-private partnership that funds such excursions, has visits planned soon to Chicago, Brazil, Chile and China.
Those close to the governor shrug off the notion that he’s promoting himself more than his state. “You can accomplish important state and job-creation goals while also accruing political benefits as well,” said Ray Sullivan, Perry’s former chief of staff.
Added Perry spokeswoman Lucy Nashed: “He’s the best cheerleader for Texas.”
Critics, though, say it’s little coincidence that the trips distract attention from a grand jury in Austin that’s hearing accusations he abused his power in a struggle with the local district attorney. “Maybe he should focus on getting his office back on track before he worries about running for office in 2016,” the Texas Democratic Party said in a statement Tuesday.
TexasOne says its efforts have helped convince companies to announce the creation of nearly 45,000 new jobs in Texas since 2004, though not all of those positions eventually materialized. Toyota was the first major corporation lassoed.
No one disputes Texas’ job growth numbers, which are Perry’s top political selling point. The Bureau of Labor Statistics says the state created a third of all net new jobs across the country between 2003 and last year, and unemployment statewide remains well below the 6.7 percent national rate.
Unemployment is much higher in California. But Good Jobs First, a Washington-based watchdog group that has criticized Perry’s job poaching in other states, points out that studies also show Texas is the third-largest source of companies and jobs moving to California.
“Every year Texas loses some companies and gains some,” said Greg LeRoy, Good Jobs First’s executive director. “It’s been a net winner, for sure, but not a huge one.”
While in New York, Perry challenged New York Democratic Gov. Mario Cuomo to a debate on economic policy. Cuomo demurred, but the offer had symbolic value coming from Perry, whose debate brain-freeze helped cripple his 2012 White House campaign.
Perry also held his own while debating Democratic Gov. Martin O’Malley of Maryland on CNN in September.
“If Governor Perry can step up his debate performances, I can see where he’ll have a lot of appeal,” said Holly Lintner, executive director of the National Federation of Pachyderm Clubs, a Missouri-based conservative group. “He certainly has the look and the charisma, the qualities to be president.”
When asked about 2016, Perry always offers some variation of the same answer: “America’s a great place for second chances.”
(AP)
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7 Responses
Gov. Perry’s cheap trick of lowering taxes and increasing subsidies for American businesses to move from one state to another is not a strategy for growth, it is a strategy for disintermediation, i.e., moving stuff around to save some money. But the US is not going to compete with low-wage economies for manufacturing jobs, because wages abroad are unacceptably low for American workers and, more importantly for Mr. Perry’s White House dreams, American voters. And tax breaks won’t make US costs competitive. Real growth of the American economy (as distinguished from Texas’s cannibalization of other American states’ economies) requires research, development, investment and wise government spending, among other things. If Mr. Perry cannot demonstrate that he understands that and knows how to do that, he will go no where near the White House, except as a tourist.
California’s current government is notoriously anti-business in general, and anti-automobile business in particular, and especially anti-Toyota, this isn’t such a big deal. He’s not “poaching” but more like acting as a granting asylum to a refugee.
Despite the Republican propaganda, Texas isn’t a low tax state. The latest report from the Tax Foundation rank it #11 in sales taxes and #14 in property taxes among the 50 states and the District of Columbia. This despite the fact that much of its revenue comes from taxes on the oil and gas industries that are passed on to non-Texans. Basically, Texas’ method only works if you are an energy exporting jurisdiction.
Should Perry become the Republican nominee, watch for the Democratic ads of all the Texans having to go to Mexico for their health care. The healthcare system in Texas is a disaster.
“increasing subsidies for American businesses to move from one state to another”
One American politician has realized this and taken action: California Governor Jerry Brown. Over the objections of special interests who love to dole out corporate welfare, he abolished all of that state’s local Economic Development Authorities. He correctly saw that they were fighting each other and wasting tax money. Toyota may have defected to Texas because Brown refused the Pay to Play corruption; the Japanese automakers have received billions in subsidies (which led directly to the multibillion dollar bailout of their competitors Chrysler and GM). Perry, OTOH, has a long history of using tax money to reward his cronies.
We should have paid Brown more attention during his Presidential campaigns. Unfortunately he is now in his mid-seventies and even though he is in excellent health nobody will consider someone that old for the office.
But its low in income tax, which it turns out is a major factor in encouraging economic development. A high sales tax does much less economic damage than a high income tax, and may help since it encourages savings rather than consumption. Comparing the level of economic development over the last few generations, it is clear that low income tax rates promote development – and why states such as New York have seen a serious decline in their population and prosperity relative to the low tax states. Why when I was a child, one called New York the “Empire State” with a straight face.
“states such as New York have seen a serious decline in their population and prosperity”
New York State’s population has not declined since the 1970s. The low tax areas upstate, especially in the far western part of the state, have indeed declined since then. But New York City, which has the highest income tax rates in America, has gained more people since 1980 than the entire population of Dallas, Texas!
New York used to be #1 – by an incredible margin. Texas wasn’t even considered a major state economically. Indeed, the entire south was considered a hopeless backwater. And today, the high tax “blue” states are in decline.
Another good comparison is Virginia and Maryland. Fifty years ago Maryland was light years ahead of Virginia, today they are even.