Thursday, January 9, 2014

The Local "Economic Development" Swindle

TPPF Policy Orientation Panel:
Economic Development: On the Backs of the Taxpayers or by their Bootstraps?!?

James Quintero (TPPF); Carlton Schwab (Texas Economic Development Council); Benjamin Powell (Free Market Institute at Texas Tech University); Bennett Sandlin (Texas Municipal League); Art Martinez de Vara (Mayor, von Ormy, Texas)

Carlton Schwab:
  • The legislation that enables local 'economic development' sales tax abatements was passed by Bill Ratliff in the early 1990's.
    • Personal Note: That Bill Ratliff is the originator of this policy tells you everything you need to know.
Benjamin Powell:
  • Those who do the best are the ones who interfere in their economies the least. 
  • Planners don't know what industries to promote.
  • All economic developments are either redundant or failures.
  • Texas is one of the freest states in the U.S., which is why we're one of the most prosperous.
  • Local 'economic development': "Give nothing a chance!!!"
  • Eminent domain for 'economic development' is "inefficient and evil."
  • Keep taxes low, secure people and property rights, and get out of the way.
Bennett Sandlin:
  • Economic development is ok at the local level, but not at a higher level of govt.
Art Martinez de Vara:
  • Suburb southwest of San Antonio.
  • "We've decided to structurally compete with San Antonio" instead of giving traditional 'economic development' subsidies.
  • Most Hispanic city in Bexar county
  • Changing the way local government works:
    • Zero cost permitting.
    • Eliminated mass transit sales tax.
    • Minimal regulatory environment.
    • Virtual City Hall
    • City Marshall Office, no police dept. (24 volunteers)
    • Non-Profit partnership for Animal control
      • Big issue in rural areas
    • Only city in Bexar county that allows fireworks.
    • No gun restrictions
    • No nighttime curfew.
    • You can smoke a cigar and drink a large soda.
    • Recruited charter schools as an alternative to government schools.
  • Fiscal Responsibility
    • Zero based budgeting
    • No debt
  • Results
    • Sales Tax revenue up 45% in 2013
    • Up 260% since 2010
    • Property tax rates down 45% since 2010.
    • Tax rate less than 2% of San Antonio.
  • Very organic, bottom-up, approach 
  • Julian Castro's admin uses their utility payments to subsidize 'economic development' in San Antonio at the expense of their city.
Bottom Line: Ben Powell and Mayor Martinez offered a refreshingly different perspective.

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