January **, 2010
Recession Pounds Perry’s Jobs Fund
Endnotes:
1 TEF is a program of the Governor’s Economic Development and Tourism Office.
2 TEF amended the Texas Energy Center deal in 2005. As discussed later, that same year TEF appears to have informally granted Washington Mutual an extension to meet its job targets.
3 The lieutenant governor and House speaker do not sign off on amendments to TEF agreements, according to the Governor’s Office.
4 “Gov. Perry Meets with State Leaders to Discuss Texas Economy,” Governor’s Office media release, October 6, 2008. This meeting occurred days after Congress passed legislation authorizing the bank bailout called the Troubled Asset Relief Program (TARP).
5 "Perry's Statement on New Jobs 'Just Not True,'" Austin American-Statesman, January 13, 2010.
6 Texas’ unemployment rate peaked at 6.8 percent during the 2003 dot.com bomb.
7 To see U.S. and Texas employment growth rates side by side, refer to the A&M Real Estate Center’s “Monthly Review of the Texas Economy, November 2009.” http://recenter.tamu.edu/pdf/1862.pdf
8 “Economy Cuts Both Ways for Perry,” Dallas Morning News, March 10, 2009.
9 The Governor’s Office listed three projects bereft of job targets. Baylor College of Medicine milked $2 million from TEF for a no-jobs-required proposal to map the genetic structure of a cow. The parties terminated the Baylor deal in October 2009, declaring all its terms met. TEF also awarded $9.8 million to two projects connecting major Texas universities via a fiber-optic network: The Lonestar Education & Research Network (LEARN) and the Texas Internet Grid for Research & Education (TIGRE). TEF’s list treats LEARN and TIGRE as a single grant despite the fact that they signed separate TEF contracts.
10 These TEF recipients are: Associated Hygienic Products, Caterpillar, FlightSafety International, KLN Steel Products, and the U.S. Bowling Congress.
11 This excludes Sematech, for which the Governor’s Office provided no jobs data.
12 A&M’s Texas Institute for Genomic Medicine and UT’s Center for Advanced Biomedical Imaging in Houston.
13 Hewlett-Packard and Maxim Integrated Product’s project in Irving.
14 TEF formally amended contracts with Allied Production, Lockheed Martin, Martifer Energia, Rackspace, Rockwall Collins, Texas Energy Center and the Texas Institute for Genomic Medicine. At press time the Governor’s Office had yet to provide a copy of its contract amendment with Lockheed. TEF also appears to have informally amended Washington Mutual’s contract to grant it a four-month extension to meet its 2005 job targets. WaMu’s 2008 compliance report also cobbled together the hours of its part-time employees to generate an unspecified number of full-time-equivalent jobs. Although WaMu’s contract explicitly requires “full-time employment positions,” the Governor’s Office said TEF routinely accepts full-time equivalents instead.
15 “HP May Cut as Many Jobs As 25,000,” Latin American Herald Tribune, July 19, 2005.
16 HP’s first job target was a total of 180 new jobs by the end of 2007.
17 The state also kicked in $20 million in work on the I-35 interchange near the Buda store. See “Cabela’s Sought Big Incentives From State,” Austin American-Statesman, November 22, 2005.
18 The contract stipulates that the Cabela’s jobs offer an average annual gross compensation of at least $23,000 (inflation-adjusted to $24,408).
19 “Hiring Targest Missed, Cabela’s Repays Texas,” Austin American-Statesman, August 15, 2006.
20 Fidelity’s 2008 tally includes six employees who worked at company subsidiaries that were not covered by its TEF agreement. The Governor’s Office said that it agreed to expand the agreement to cover additional subsidies.
21 “Dalhart’s Dairy Boom,” Dairy Today, June/July 2007.
22 “Behold the Power of Cheese,” Texas Dairy Review,” January 2006.
23 Sanderson’s 2007 target was 669 jobs.
24 The Midland Development Corp. awarded Trace another $400,000 in public funds.
25 “Airplane engine firm to hire 114,” Midland Reporter-Telegram, August 23, 2006.
26 “Revving up the economy,” Odessa American, April 23, 2007.
27 Allied is a subsidiary of Titan Tank & Vessels LLC.
28 Including at least 300 direct hires and no more than 300 jobs through Orion-project subcontractors
29 This included 495 direct hires and 208 Orion subcontractors.
30 Reflecting the contractually stipulated $861 per missing job.
31 The amended agreement calls for 4,000 jobs by the end of 2015; the original deal required 4,000 jobs by the end of 2012.
32 This amendment dropped the pre-agreement baseline from 947 Rockwell employees in Texas to 932 Texas employees.
33 With the lower jobs baseline adopted a month after Rockwell filed this report, this deficit presumably would drop to a shortage of 113 jobs.
34 The Center reported that it had a hand in creating the most jobs at EMS Pipelines Services, Inc. (817 jobs), Sunoco Logistics Partners, LP (228) and Schlumberger Technology Corp. (115).
35 “Beneficiary of State Grant Has Links To Perry,” Houston Chronicle, August 7, 2005. The contributing stockholders were Robert McNair, William McMinn and Gordon Cain’s family (Gordon Cain died in 2002).
36 The agreement also includes jobs at concerns in which Lexicon owns 50 percent or more.
37 The Texas Workforce Commission credited Texas jobs in these industries to the A&M Institute: Wet Corn Milling; Soybean Processing; Other Oilseed Processing; Ethyl Alcohol Manufacturing; All Other Basic Organic Chemicals; Cellulosic Organic Fiber Manufacturing; Nitrogenous Fertilizer Manufacturing; Phosphatic Fertilizer Manufacturing; Fertilizer (Mixing Only) Manufacturing; Agricultural Chemicals Except Fertilizer; Medicinal and Botanical Manufacturing; Pharmaceutical Preparation Manufacturing; In-Vitro Diagnostic Substance Mfg; Other Biological Product Manufacturing; Electromedical Apparatus Manufacturing; Analytical Laboratory Instruments; Irradiation Apparatus Manufacturing; Surgical and Medical Instrument Mfg; Dental Equipment and Supplies Mfg; Ophthalmic Goods Manufacturing; Dental Laboratories; Testing Laboratories; Research and Development in the Physical, Engineering, and Life Sciences; Medical Laboratories; and Diagnostic Imaging Centers.
38 Under the original deal Lexicon already would have had to create 1,550 new jobs by then.
39 Lexicon separately reported “no new employment positions” in 2008.
40 The original agreement requires claimed jobs to have an average annual gross compensation of $60,000—or $15,000 per quarter. The Workforce Commission divides quarterly payroll wages in the selected industries by $15,000. If aggregate compensation exceeds the floor amount, A&M gets extra job brownie points.
41 “Washington Mutual Lays Off 255 Employees,” Associated Press, November 2, 2006.
42 The contribution came three months after the ailing bank announced that it would eliminate 3,000 jobs nationwide.
43 “J.P. Morgan Chase To Cut 2,800 Jobs at WaMu,” Dallas Morning News, February 27, 2009.
44 In 2006 WaMu claimed a 30-job surplus beyond its target of 1,200 jobs.
45 WaMu reported that the new facility accounted for 1,855 of these employees.
46 “Enterprise Fund Companies Allowed to Count Part-Time Jobs,” Associated Press, April 17, 2009.
47 This amounts to a 20-job surplus beyond the 2007 target of 20 jobs—provided that you count the 32 preexisting Amapcet jobs as “new.”
48 “Bank Treads Carefully,” Dallas Morning News, January 23, 2009.
49 “Countrywide Plans Deep Cuts,” New York Times, September 8, 2007.
50 “Perry Blasts Washington Inaction On Rescue Plan,” Associated Press, Austin American-Statesman, October 1, 2008.
51 “Gov. Rick Perry’s Remarks Regarding Countrywide Financing,” Office of the Governor, December 14, 2004.
52 “Texas-Size Stakes: Austin Lands Samsung’s $4 Billion Fab,” Site Selection Magazine, May 4, 2006.
53 Including 275 direct hires and 100 contract workers.
54 284 direct hires and 194 contractors. Yet Samsung did not appear on a TEF-provided list of grantees that maintained surplus job credits at year-end 2008. The Governor’s Office said this was because Samsung did not file all its compliance documents on time, thereby sacrificing any surplus job credits.
55 Several day before Samsung completed its 2008 compliance report an Austin paper reported a modest layoff of fewer than 20 of Samsung’s 1,800 local employees in response to “a severe global downturn in demand for semiconductor products.” See “Samsung Reorganizes Austin Subsidiary,” Austin American-Statesman, January 27, 2009.
56 “Samsung Austin Semiconductors Plans To Cut 550 Jobs,” Austin American-Statesman, August 12, 2009.
57 “Samsung Lays Off Hundreds for Project,” KXAN Austin, August 14, 2009 (updated August 15, 2009).
58 Superior reported 78 new jobs in 2006 and 65 in 2007.
59 “Who’s Funding Workforce Development?” The Policy Page, Center For Public Policy Priorities, April 4, 2005. The Texas Workforce Commission administers the Skills Development Fund.
60 “Tyson Foods Illegal Immigrant Lawsuit Thrown Out,” Associated Press, February 13, 2008.
61 After 2011 Vought is allowed to count new Texas jobs created by the company’s suppliers, provided that the jobs are tied to Vought’s expansion.
62 “Vought Will Trim 600 Positions; Most of the Cuts To Be In Dallas,” Dallas Morning News, April 5, 2006. The agreement only allows Vaught to count new jobs that have been in effect for 12 months. In April 2006 the Governor’s Office said that Vaught had created 1,200 jobs, including 750 that had been in place for at least one year.
63 “Vought’s Grant Has an Escape Clause,” Dallas Morning News, May 15, 2006. “Vaught’s Plans Up In Air,” Dallas Morning News, June 13, 2005.
64 A similar, earlier variant of the agreement is dated November 1, 2003.
65 The deal also calls for Sematech to spur 4,000 indirect jobs by 2014.
66 “Money Tight, Sematech Cuts 80 Jobs,” Austin American-Statesman, January 13, 2006.
67 “New York Made Sematech an Offer it Couldn’t Refuse,” Austin American-Statesman, May 11, 2007.
68 “Sematech May Sell Austin Lab,” Austin American-Statesman, October 12, 2007. Sematech sold its original Austin fab plant to California-based SVTC Technologies in December 2007.
69 “Chip Alliance Sematech Again Taps IBM For Chief,” Austin American-Statesman, November 18, 2009.
70 “International Sematech Agrees to Locate Headquarters at University at Albany Nanocollege,” Governor Eliot Spitzer press release, May 9, 2007.
71 Email from Sematech Director of Corporate Relations Anne Englander, January 4, 2010.
72 “Finally Chip-Shape: Plant Build in ’06 To Begin Production,” Dallas Morning News, September 30, 2009.
73 “TI To Cut 191 Jobs,” Associated Press, September 10, 2007.
74 “Texas Instruments Wins $51 Million Tax Credit for Richardson Plant,” Dallas Morning News, January 9, 2010.
75 GE has no job-creation targets.
76 Dr. Kenneth Shine letter to Texans for Public Justice, December 22, 2009.