Q and A with Governor Greg Abbott
Businesses grow better in Texas. That’s the finding of a recent study showing Texas’ middle-market companies outpacing the nation in revenue and employment growth in 2015. And, because CEOs and owners in Texas are more likely to invest capital in their companies when compared to their counterparts nationwide, that trend is projected to continue.
Q: What does Texas offer that attracts businesses of all sizes?
A: The nation’s top CEOs continually rank Texas as the best state for business. Texas also ranks first for business facility projects of $1 million or more, and for both foreign and domestic investments.
If you were to ask companies like Apple, Amazon, Facebook, Farmer Brothers, GM Financial, Google, Kubota Tractor, LiveOps Cloud, Microsoft, Oracle and Toyota, to name just a few, why they are relocating to or expanding in Texas, you would likely hear five top reasons repeated:
- Texas offers a job-ready workforce, 13 million strong. Businesses grow where the workforce is ready, and Texas offers the second-largest workforce in the nation. With one of the youngest median ages in the country, employees here are also among the most engaged.
- Texas offers lower operating costs. Texas imposes no personal or corporate income tax, and we just cut taxes by nearly $4 billion, including a permanent 25 percent reduction in the business franchise tax. We are also speeding up permitting processes and reining in regulatory regimes that create compliance complexities.
- Texas offers lower costs of living with a high quality of life. “Night and day.” That’s how one CEO described the difference between Silicon Valley and his new Texas headquarters. “I want my employees to be able to have a good quality of life, live in a city with low crime rates, good schools,” he said. “And that’s what we’re doing here.” That’s why Texas ranks as the best state to make a living in, and why Texas cities, large and small, continue to attract millennials, families and entrepreneurs.
- Texas offers robust infrastructure and easy port access. Texas is in a unique strategic and geographic position for trade, with close access to Mexico, trade links to Canada and direct shipping routes to Europe and beyond. Our world-class ports, international air routes and extensive highway and rail systems make Texas a major North American hub.
- Texas offers the freedom to grow. Businesses succeed in Texas because we’ve built a framework that allows free enterprise to flourish. Less government, lower taxes, smarter regulations and right-to-work laws are the economic policies attracting employers to Texas from states that overtax and over-regulate.
Q: Texas ranks first for economic climate, but what is the impact of oil price volatility?
A: Because of the robust strength, resilience and diversity of the Texas economy — the 12th largest in the world — jobs are growing and employment is holding steady in Texas, according to the Federal Reserve Bank of Dallas, despite losses in the energy sector driven by the drop in oil prices. In fact, manufacturing in Texas accelerated in the last quarter of 2015.
Texas is still the nation’s largest oil producer, and we rely less on oil and gas taxes for general revenue than other major oil-producing states. Over the last decade, Texas has nurtured development in six industry sectors with the greatest growth potential: Advanced Technology and Manufacturing; Aerospace, Aviation and Defense; Biotechnology and Life Sciences; Information and Computer Technology; Petroleum Refining and Chemical Products; and Energy.
That strategy is working. Texas employers added 166,900 non-farm jobs across nine of 11 major industries in 2015. Job creators include 2.4 million small businesses and 54 Fortune 500 companies. And growth is widespread, with nine Texas cities among the nation’s top 10 fastest-growing economies.
As a result, Texas leads the nation in private-sector job growth, adding over 1.85 million jobs in the last 10 years. In fact, if not for Texas’ record job growth, the nation as a whole would have experienced a net job loss after the 2007 recession. And, even as our population grows, the unemployment rate in Texas has been at or below the national average for 108 consecutive months.
Finally, we are making strategic investments to spur continuing economic expansion while keeping our state strong and prosperous with a budget below the state’s spending limit.
Q: What are the opportunities for expanded trade in Texas?
A: Texas continues to lead the nation in exports — for the 14th year in a row.
Texas exports of $251 billion accounted for more than 16 percent of all U.S. goods in 2015. And for the third year in a row, Texas surpassed California for high-tech exports.
Last year, I had the opportunity to lead business development missions abroad and saw firsthand the impact Texas businesses are having. This year, I plan to lead more domestic and international missions to create more opportunities for Texas businesses to compete in the global marketplace.
Q: What other investments is Texas making to encourage future growth?
A: Because technologies not yet invented will drive continuing innovation, we are committing $450 million to elevate our university research programs and to attract even more nationally-recognized researchers and Nobel Laureates to our higher education institutions. We are making college more affordable and ensuring the path to career and technical training is cleared of obstacles. Already experiencing the second-highest high school graduation rate in the nation for Hispanic and African-American students, we are aiming to be the No. 1 education system in America.
To keep Texas commerce and commuters moving, we’re adding nearly $4 billion more per year to improve our roads without raising fees, tolls, taxes or debt.
And we’ve added $90 million to the Texas Enterprise Fund, one of the nation’s most powerful deal-closing incentive programs.
Finally, as Governor, I will continue my legacy of pushing back against the heavy hand of costly federal over-regulation.
By unleashing the power of entrepreneurs and innovators — and securing the freedom to aspire — Texas will long remain the best state for business.
I invite you to visit TexasWideOpenForBusiness.com.
Texas’ Top Recent Investments
- Apple plans to locate its second-largest global campus in Austin — part of the company’s pledge to invest $282 million over ten years. The new 1.1 million-square-foot office space will house nearly 7,000 employees when it opens in 2016.
- Amazon is building a fifth Texas fulfillment center in San Marcos, creating more than 1,000 full-time positions. To date, Amazon employs more than 3,500 full-time associates in Texas, investing more than $400 million in the state.
- Facebook celebrated the groundbreaking of its new data center in Fort Worth in July 2015. The data center is projected to create more than $500 million in capital investment within five years, along with at least 40 full-time jobs.
- Toyota brought operations to Texas last year after announcing plans to relocate its North American headquarters to Plano in 2014. The company broke ground in January 2015, bringing with it 4,000 jobs and $350 million in investment.
- Kubota Tractor announced plans in 2015 to relocate its U.S. headquarters from California to Texas, a $52 million investment, creating more than 300 jobs. The Japan-based company was the first to receive the newly bolstered Texas Enterprise Fund.