The Texas AFL-CIO has called attention to a New York Times article exposing three-cornered graft with tax breaks for corporations, budget cuts, and campaign contributions. Texas, which doles out a record $19 billion per year in corporate welfare, was singled out as the worst example.
In Texas, corporations get big gobs of tax money from state funds that are largely controlled by Governor Rick Perry and Lieutenant Governor David Dewhurst. Their theory is that the corporations will create wealth that adds to the state’s tax revenues.
It’s only incidental, state officials say, that so much of the money ends up in campaign coffers.
As Perry told the nation repeatedly during his presidential fiasco, Texas has an outstanding record for job creation. The Texas AFL-CIO and more serious analysts, however, point out that Texas benefitted because its economy is led by three of the strongest recession-proof industries: agriculture, oil, and military production.
They also point out that statistics on job creation don’t mean much when your state has the third-highest proportion of hourly jobs paying at or below minimum wage, the highest proportion of uninsured citizens, and the 11th-highest poverty rate among states.
Texans get jobs, but they don’t get paid much!
Plus, the state cuts funding to critical functions, such as public schools. The last legislature took billions away from the schools. Currently, 600 districts are suing the state over unfair and inadequate funding. Teachers and others argued that the state should use some of its giant “Rainy Day” fund to keep the schools going and hold class sizes down, but Perry quashed that idea. His detractors said Perry considers the “Rainy Day” fund, along with the Enterprise and Emerging Technology funds, as his personal money.
Perry’s constant courting of far-right money magnates has also led him to turn down big federal grants for the unemployed and for extending Medicare coverage to about 1.8 million of the poorest Texans who will otherwise remain uninsured.
The most recent corporate welfare scandal was published Nov. 17 in the Dallas Morning News under the headline, “State’s cancer-fighting agency funded projects of Perry campaign contributor.” The reporters showed the close ties between companies owned by multimillionaire David Shanahan and the state’s new agency, the Cancer Prevention and Research Institute of Texas (CPRIT). Governor Perry and Lieutenant Governor Dewhurst received major campaign contributions from Shanahan and those close to him while lucrative state contracts went to Shanahan. The Dallas reporters questioned the awards process. A public release from the Texas AFL-CIO says that the connections between state giveaways and campaign contributions “…certainly merits more examination in the coming legislative session.”
But, as The New York Times also points out, Texas may be the largest cash cow to corporations in the name of job creation, but it’s not the only state. The Times investigation found that state – and local – governments give away $80 billion a year in “tax breaks and other subsidies in a foolhardy, shortsighted race to attract companies.”
Instead of investing in transportation, education and other public services, which are also job generators, governments give away the taxpayer money to giant corporations like Samsung, Amazon, Walmart – hardly in need – for the illusive jobs and economic growth. Then corporations turn around and demand more and more tax abatements and other incentives to keep the jobs, otherwise threatening to leave for another place where that local government is willing to turn over its largesse.
In the labor movement, it’s called “whipsawing” and a “race to the bottom” – a race the only winners of which are the one-percent corporate and political elite.
Teresa Albano contributed to this article.