Since 2003, the Texas Enterprise Fund has been a taxpayer-funded initiative to attract companies to the state.
Wednesday, the Gov. Rick Perry’s office announced a $1.9 million payout to California-based HID Global.
The state claims the money is an investment that is expected to generate 239 manufacturing jobs worth $35 million.
Texans for Public Justice keeps track of how taxpayer money is spent. Research Director Andrew Wheat questions whether it is proper for a politician to offer public funding on the promise of job creation.
"Be it Rick Perry, be it Barack Obama or be it Lee Leffingwell, should they be in the habit of doling out tax payer dollars to private companies," Wheat said.
According to the governor, the fund has a proven track record-- claiming since 2003, $471 million of taxpayer money has generated 63,700 new jobs worth $22.4 billion.
The City of Austin is doing its part as well, chipping in $900,000 to the fund over 10 years.
According to Austin's Economic Development Manager Brian Gildea, HID exceeds city requirements for receiving public monies.
"We're looking at a net benefit of 2.2 million after the potential incentive of 920 thousand roughly, is factored in,” he said.
The Austin City Council must vote on the issue before the deal is done. In the meantime, some continue to question that type of transaction.
Here's the full statement from Gov. Perry's office on the deal:
Gov. Rick Perry has announced the state is investing $1.9 million through the Texas Enterprise Fund (TEF) in HID Global Corp. This TEF investment will create 239 jobs and more than $35 million in capital investment at a new manufacturing and distribution center in Austin. The agreement is contingent upon finalization of local incentives.
"Employers know they can come to Texas to create jobs and opportunity because we've kept our taxes low and regulations predictable, and made sure our courts are fair and our workforce is skilled and educated," Gov. Perry said. "This TEF investment will create a job and livelihood for more than 230 Texans, and adds HID Global Corp. to the long list of world class employers that have chosen to do business in Austin."
HID Global is a worldwide leader in secure identity solutions. The new facility will be the company's future operations center for North America that will produce and distribute a variety of identity and access management products.
"Texas is an ideal location for investing in the construction of our new state of the art facility, thanks to its business-friendly climate and state and local incentives," Rodney Glass, HID senior vice president of Global Quality and Operations said. "And the City of Austin represents a robust resource base of people and services that will provide an excellent platform for scaling our operations to support the future growth of our business."
The Legislature created the TEF in 2003 and has re-appropriated funding in every legislative session since then to help ensure the growth of Texas businesses and create more jobs throughout the state.
TEF projects must be approved by the governor, lieutenant governor and speaker of the House. The fund has since become one of the state's most competitive tools to recruit and bolster business.
To date, the TEF has invested more than $471 million and closed the deal on projects generating more than 63,700 new jobs and more than $22.4 billion in capital investment in the state.