Texas Sharpens Its Claws on Clawbacks, a Promising Sign for Enterprise Fund Taxpayers

For years, the Texas Enterprise Fund has touted its success in helping land big corporate projects, from a Samsung chip-making plant in Austin to Toyota’s North American headquarters in Plano. But how the fund deals with failure may be just as important.Credibility, public support and continued funding from the Legislature are necessary to keep the program alive. And in late 2014, the fund was shaken after an audit revealed problems with oversight, accountability and transparency.Since then, new standards were enacted and the governor’s office stepped up monitoring of the agreements. Some early results are promising.In the past two years, contracts with 16 companies have been canceled largely because employers failed to hit hiring targets. Over that time, the enterprise fund recouped over $19 million in damages, also known as clawbacks, and other repayments. And the canceled contracts freed up an additional $12 million that had been committed and never released, according to the fund’s 2017 report to the Legislature.Such recoveries are higher than usual. Six companies, in fact, repaid all they received plus interest. USAA in Plano, TD Ameritrade in Fort Worth and TEKsystems in Irving were part of that group, according to the report.While corporate incentives are often decried, the clawbacks show that the state is willing to go to lengths to protect taxpayer money.  Continue reading...