As the 10th largest economy in the world, if Texas were a nation, the Lone Star State boasts a booming economy and countless accolades for its business friendliness. In 2016, Texas welcomed more than 800 foreign and domestic investment projects across a diverse range of industries—from advanced technology and manufacturing to biotechnology and life sciences. As a result of the state’s largest investments alone, Texas gained over 5,000 jobs and a half a billion dollars in capital investment.
Major Recent Texas Investments
- Charles Schwab – The financial industry leader announced plans to establish a 500,000-square-foot, $100 million campus in Westlake, creating more than 1,200 jobs in North Texas.
- W.W. Grainger – The maintenance, repair and operating (MRO) products supplier opened a new San Antonio sales facility, a $3.9 million investment that will result in the creation of 200 jobs.
- McKesson – The healthcare services and information technology leader plans to expand its operations and open a regional office in Irving, creating 975 new jobs and $157 million in capital investment.
- Jamba Juice – The smoothie giant announced plans in May 2016 to relocate headquarters from California to Frisco, creating 100 jobs.
- Mitsubishi Heavy Industries – This world-leading industrial firm announced plans in May 2016 to relocate its North American headquarters from New York to Houston.
- SATA Group – SATA, a high-tech components manufacturer, plans to construct a new machine plant in Brownsville, generating $114 million in capital investment and 300 new jobs.
With the global battle for jobs and investment fiercer than ever, with rivals like California, Georgia and Utah vying for the top spot, Texas continues to be strategic in maintaining its position as a leader in job creation. And, as the Lone Star State enters its 85th Legislative Session, Governor Abbott hopes to pass measures that make Texas even more attractive to businesses than ever.
In his State of the State address to the Texas Legislature in February, Governor Greg Abbott revealed a business-friendly agenda and budget to help drive economic success in the state. Highlights of the Governor’s Budget:
• Fully fund job creation programs like the Texas Enterprise Fund (TEF)
• Cut taxes on employers (franchise tax) by another $250 million
• Fully fund $5 billion in additional road construction without new taxes, fees, debt, or tolls
• Fully fund the Governor’s University Research Initiative (GURI)
• Fully fund optional, high-quality Pre-K programs
A History of Low-Tax Legislation
In 2015, during his first session in office, Governor Abbott successfully passed a number of measures that took Texas to the next level in terms of its ability to attract businesses. One of the most significant achievements of the session was passing an across-the-board 25 percent reduction in the franchise tax—a game-changer considering Texas’ already low tax burden. Texas lawmakers also passed a meaningful property tax cut to increase the homestead exemption by $10,000.
Another notable achievement was the replenishment of the Texas Enterprise Fund (TEF), the state’s most powerful “deal closing” fund. Since its inception in 2004, the program has awarded more than 100 grants totaling more than $600 million across a wide variety of industries. During the last fiscal year, the program awarded funds to 14 projects that promise to create more than 5,300 jobs in the state.
One TEF-recipient success story is Toyota, which announced plans in 2014 to move its U.S. headquarters from California to Plano, just twenty miles northeast of downtown Dallas. The move will create 4,000 jobs at the Plano facility, which is slated to open this year.
Now, with his proposed budget for the 2018-19 biennium, Governor Abbott has pledged, not only to continue to fund the TEF, but also to further cut the franchise tax by $250 million, providing additional relief for business to invest in growing their operations and workforce.
Fueling Businesses with a Robust Talent Pipeline
Home to 38 public universities and upper-division centers and 50 community college districts, Texas continues to feed a strong talent pipeline to businesses. Four Texas business schools and several universities ranked among the best in the world in 2016, according to the U.S. News & World Report.
The creation of the Governor’s University Research Initiative (GURI) during the 84th legislative session was a major achievement in the effort to elevate Texas’ university system, grow the state’s talent pipeline and increase Texas-grown innovation. The program offers grant matching to qualifying higher education institutions to hire top-of-field faculty, such as noble laureates and prestigious national honorific society members.
Last year, the GURI program approved 11 grants, totaling $39 million to recruit top-tier researchers to the University of Houston, Texas A&M University and the University of Texas. These researchers join Texas’ already skilled, diverse and educated workforce of 13 million people and amplify the name recognition of Texas institutions.
Governor Abbott’s new proposed budget fully funds the GURI program and dedicates funds to optional, high-quality Pre-K programs to give young Texans a solid foundation for their education.
Growing Texas’ World-Class Infrastructure
Among Texas’ natural business advantages are its the central location, 600-plus miles of coastline and wide-open land available for large expansions. But, much of the ease of doing business in the state can be attributed to its world-class infrastructure.
Texas is home to more public roads and freight railroads than any other state. And with 16 seaports, including 11 deep water ports with channels at least 30 feet deep, Texas ranks as the top U.S. state for manufacturing exports and shipment value. Of these ports, 11 are designated as foreign trade zones (FTZ), allowing the flow of goods without formals customs entry, import quotas or most other restrictions.
As a result, Texas ranked as the top exporting state in the nation for the 14th consecutive year by the U.S. Bureau of Economic Analysis in 2016. The Lone Star State exported more than $251 billion in goods in 2015, well ahead of California, which ranked second, with $165 billion in exports.
Moving Business Forward
To ensure that Texas can support the tremendous growth it has experienced over the last decade, Governor Abbott made transportation funding a major priority during the last legislative session. In 2016, as a result, the state began dedicating a portion of state sales tax to improving transportation, which, combined with ending diversions from the State Highway Fund, allowed transportation funding to increase by as much as $4.5 billion per year without raising taxes, fees, tolls or debt.
Governor Abbott is committed to continuing this momentum. His budget for the 2018-19 biennium includes funding more than $5 billion in additional road construction.
With these and other pro-business proposals on the table, Texas is slated to continue to welcome investments from companies flocking to the Lone Star State from across the nation and around the world.
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