News Column

Texas Economic Development Tax: 10-year Review

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And even though jobs weren't added, Billingsley said Countrywide taught the board an important lesson in how to structure contracts.

"Countrywide said, 'Why don't we come to you with jobs created and you give us incentive based on what we did,'" Billingsley said. "We had finally hit upon a formula that worked."

The about $4.5 million Entrada Business Park and Building A also have been one of the "controversial" investments, Nelson said.

The building was completed near the end of 2004. It remains empty. But, Nelson and James said it's been a vital component of the MDC's economic development offerings.

"When we made the decision to put it out there, the people who we were in competition with had buildings," James said. "We were years behind communities that had been out there. We just didn't have those resources. It's obviously sad the building's still empty."

With the building, Billingsley said the MDC was able to stay on the list of cities being considered by several companies. Even if the company didn't end up needing the building, just having it there gave Midland an edge to compete in certain industries, he said.

"If you don't have that, you're not competing," he said. "The competition is over."

Critics point to these and other cases as reasons for the MDC to get out of the incentive business.

"Midland has gone through two hot oil cycles with big economic activity," said James Busby, who blogs under the auspice of "Ospurt," and voted for the tax. "It just seems like they start working down a path and then we have low unemployment and they can't bring people in, so they change their focus. Then employment goes up, and they change their focus. I would've expected more concrete projects to have come to fruition."

Future

Hatley and Rendall said aviation is a prime target and that the energy industry, including solar power, will be key as they pursue future deals. Infrastructure also will continue to have a place, though it won't ever become the sole focus, leaders said.

James said without the economic development tax, other taxes would increase. The MDC has helped increase the property tax base downtown, added employees who pay taxes and invests in infrastructure that if not paid through the MDC would have to be paid for elsewhere, he said.

If people's expectations have not been met, it's likely because they expected big results right away instead of understanding it's a generational project, he said.

"I think it was a mis-sale," James said. "The mis-sale was about the horizon, not the objectives."

Morales said if he were asked to campaign for the tax now, he likely

wouldn't agree. While he believed in its objectives at the time, he now thinks the conditions make it difficult to attract someone to Midland.

"If we were to do it today, I probably would not be in favor of going after a 4A sales tax," Morales said.

Heck said after 10 years, he'd like to see the council put the tax before the residents again. He said he respects those who are involved with the MDC and believes they're making a good effort, but that the broader system is flawed and one voters should have another chance to weigh in on.

"We're at a point in the country's history where we really need to be thinking about what kind of participation the government has in the private market," he said.

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