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.