Last week, the state of Texas awarded a $3.9 million deal to a company called Gartner Inc., a tech research firm. The company originally hoped to expand out of state, but that was before this nearly $4 million offer changed their minds. Now they’re expanding their office in Irving instead. The payout is coming from the Texas Enterprise Fund – nicknamed the “deal closer” – a business incentive fund set up by the State Legislature in 2003 to lure businesses to the state with cash.
Jill Cowan, a reporter at the Dallas Morning News, is looking at what the state gets from the deal. She says the state hopes to provide high-paying jobs for Texans, both those moving to or currently living in Texas. She says the company has promised to create 800 jobs in the city of Irving.
“That ends up being almost $5,000 per job,” she says. “Irving, as a city, sort of based their incentive offer around roughly $500 per job.” The state and the city hope that the new jobs will be an economic boost that will make up for the cost of the incentives.
Cowan says Texas has made an effort to make the Enterprise Fund more transparent by tracking and posting related numbers online.
“It’s a really interesting philosophical question for Texas right now and for Texas cities,” she says. “We have to compete with other states and other cities, and so you could certainly say that companies are the ultimate beneficiaries of a system where cities and states have to pay incentives or give them tax breaks to get that business in the first place.”
Cowan says some cities think incentives are worth it, while other cities like San Antonio decided not to make Amazon an offer in the highly-publicized race to win Amazon’s new location.
Written by Dani Matias.