Texas Growth at a Cost

What is the real price of Texas job and population growth? Tom Whitehurst Jr. from Corpus Christi's Caller slams Rick Perry's definition of "job creation." Recently, Rick Perry returned from a trip to California in which his goal was to steal firms away using tax incentives and other freebies. Part of our governor's administrative success is that he's been fairly good a keeping Texas filled with newly poached firms from states where businesses actually pay their taxes. While unemployment has been lower in Texas than most of the nation keep in mind that these benefits are mostly temporary and the problems that come with them aren't. When the grace period runs out and these companies have to contribute taxes like other businesses they do what Dell and other companies are doing by relocating to the next state that offers them a better deal.

But, what about these people whose jobs moved to Texas. Guess what? They're also following the money by moving to Texas. That means Texas' cost of living is going to rise. It also means that we will need a lot more schools, better roads, and public amenities to compensate for all this growth. Who's going to pay for all these public goods? Not the business firms that are feeding off of our funded tax incentives. That means we will pay most of the bill. If not through higher taxes, than by other means. As it is Rick Perry has already raised every fee and toll imaginable. Not to mention property taxes have skyrocketed in the last few years.

All this job poaching may seem like a good deal for Texas in the short run, but it can't be good for the economy overall. The problem with the phrase job creation is that it implies that something has been created that wasn't there before. Instead, Perry has merely taken business from somewhere else and brought it here by questionable means. The U.S. GDP doesn't going up as a result of all this poaching. In fact, it may have a negative overall effect on the economy.