Austin, TX - The Texas Association of Manufacturers (TAM) marked Manufacturers’ Day today at the Capitol by urging lawmakers to think long-term when addressing the budget shortfall and to maintain an environment that has allowed manufacturing to anchor the Texas economy.  TAM also announced its 2011 legislative priorities, which are rooted in the Association’s policy principles designed to protect and grow high quality manufacturing jobs. 

“The long-term viability of the Texas economy depends on manufacturers’ ability to continue to invest here and grow jobs.  We need sound public policy designed to fortify our economy, attract new opportunities, and protect high quality manufacturing jobs,” said Luke Bellsnyder, executive director of TAM.  “TAM urges lawmakers to embrace future-minded policy that maintains our competitive edge, sustains a broad-based, low-rate tax system, and supports a predictable regulatory environment.”

Bellsnyder described a manufacturing industry under duress.  “More than 100,000 Texas manufacturing workers have lost their jobs since the last legislative session.  While manufacturing is showing signs of a rebound – adding more jobs than other sectors – the state of our recovery is tenuous at best.  It’s more important than ever for lawmakers to ‘do no harm’ to the economic drivers in the state,” he said.

“We look forward to working with lawmakers to develop innovative ideas to help keep Texas strong.  Together we must see around corners, ferret out opportunity and avoid unintended consequences that could threaten jobs and stifle economic growth,” he said. 

Bellsnyder noted that Texas is attractive to new investment because of several successful economic development initiatives like the High Cost Gas Tax Credit and the Texas Economic Development Act (also known as Chapter 313).  TAM is urging lawmakers to protect the High Cost Gas Investment Tax Credit, which generates four dollars of economic growth for every dollar invested and creates nearly 40,000 direct jobs a year. 

“Investments in advanced technologies have opened vast natural gas reserves in Texas, creating thousands of jobs,” he said.  “In fact, the Comptroller’s Biennial Revenue Estimate recently cited the oil and gas sector among the few bright spots in the Texas economy.  We need to be mindful of initiatives like the High Cost Gas Tax Credit that are encouraging growth in an otherwise down economy.”      

Chapter 313, which allows school districts to offer tax incentives to attract economic development projects, was part of the economic development packages that attracted the likes of Toyota in San Antonio.  The Chapter 313 program includes 90 projects involving $40 billion of new investment and an estimated 5,600 high-paying jobs.

With regard to energy, TAM has long supported the development of market-based and cost effective generation sources.  “Carefully crafted fuel diversity is necessary for Texas’ future and we’ve been encouraged by promising proposals at the Capitol,” said Bellsnyder.  “However, as Texas lawmakers investigate ways to diversify our fuel mix, we urge them to keep reliability and affordability at the forefront of their discussions.  Increasing energy costs in the current economic climate would siphon away scarce resources and threaten job creation.”

TAM also supports maintaining the structural integrity of the new margins tax while seeking some technical clarifications.  “The existing broad-based, low-rate tax out-performs the previous Franchise Tax and brought in revenues closer to projections than did property or sales taxes over the current biennium,” said Bellsnyder.  “We urge the Legislature to resist changing fundamental components of the margins tax.”

In describing TAM’s environmental priorities, Bellsnyder observed that “The State of Texas, particularly the manufacturing and energy sectors, is under assault by the Environmental Protection Agency.  Texas lawmakers can do their part to keep Texas attractive to new investment and jobs by ensuring that our regulatory structure is predictable, reasonable and stable.” 

“Lawmakers should be prepared this session to fend off efforts to codify in Texas law overreaches by the federal government and proposals that include mandates that demand technologies that do not yet exist.  Similar mandates that have served to cripple economies in other states like California,” he said.

TAM has also taken a policy position on workforce development issues.  “Even in a down economy, manufacturing jobs for skilled workers go unfilled because of a lack of qualified candidates,” said Bellsnyder.  “Lawmakers can help Texas manufacturers by maintaining and implementing programs that increase flexibility for students best served by a career and technology graduation plan.  Rigorous career and technology education - with dual credit availability and continued focus on Science, Technology, Engineering and Math (STEM) - will prepare today’s students to become tomorrow’s manufacturing workers.” 

Finally, TAM supports the establishment of a sales tax exemption on research and development (R&D) materials and equipment.  “Manufacturers are responsible for half of all private sector research and development and an R&D sales tax exemption would make Texas even more attractive to new employers,” said Bellsnyder.

TAM’s complete policy principles are listed below and are available online at www.manufacturetexas.org.