When Is a (sweetheart) Deal a Deal? Texas Trims Job Goals for Companies That Won’t Hit ‘em

The state’s best-known incentive tool, the Texas Enterprise Fund, is based on performance. To get taxpayer money for expanding or relocating here, companies must meet their commitments for new hires and investment.That’s the way it should be, right?But a study released Monday found that many participants renegotiated their deals with the state after the contract was in place. In “the vast majority” of the cases it examined, the changes were favorable to the firms, the study said.Companies reduced their hiring targets, extended the time frame to meet them and expanded the definition of new jobs that would meet the contract requirements.Perhaps most troublesome to the researchers, the changes remained secret. Unlike the initial announcements from the governor’s office touting the deals, there were no follow-up releases on the lowered thresholds.When researchers requested public records on the changes, companies that had altered their contracts were more likely to legally challenge the requests.These “amendments allow firms to quietly dial back their commitments while avoiding potential public scrutiny,” the report said.Fortunately, the state also dialed back its commitment, reducing the state’s cash award to the companies. Sometimes, the incentive was lowered in proportion to the reduction in new jobs; sometimes the state didn’t cut its share as deeply, said co-author Nathan Jensen, a professor of government at the University of Texas at Austin.  Continue reading...

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