Contact: Gretchen Fox, 512-694-4326

Austin, TX – The Texas Association of Manufacturers (TAM) today acknowledged the difficult financial hurdles cleared by lawmakers during the 82nd Legislature regular session as well as the urgent need to focus on growth in manufacturing if the Texas economy is to stay strong.  TAM also previewed a concentrated effort to grow manufacturing in Texas.

“Facing grim budget circumstances, lawmakers had to balance the state’s current needs with the programs, incentives, and job creators that will keep Texas strong in the future.  That challenge continues now during the special session,” said Luke Bellsnyder, executive director of TAM.  “We appreciate the fortitude our lawmakers have showed in making tough decisions while doing what they could to keeping Texas moving forward.”

“While lawmakers grappled with unprecedented challenges, manufacturers faced a number of threats during the regular session that would have undermined the industry’s ability to grow jobs and expand investment in Texas,” said Bellsnyder.  “While the margins tax remained in tact for now, the current tax structure was under steady assault this session – a trend likely to continue during the interim,” he said.  “Veering away from our existing broad-based, low-rate tax system will dramatically reduce Texas’ competitive edge in attracting capital investment here.  We need predictability, equity and stability in the state’s business tax structure.”  Bellsnyder also noted that lawmakers targeted manufacturing exemptions that, if repealed, would discourage large-scale capital investments.

“Lawmakers were wise in resisting calls for expensive renewable energy mandates, which would have cost consumers hundreds of millions each year, exacerbating the state’s economic challenges,” said Bellsnyder.  “We commend the state’s leadership for working closely with manufacturers to be mindful of the impact of rising energy costs.”  Bellsnyder also commended lawmakers for their diligence in crafting sound policy during the sunset process for the Texas Commission on Environmental Quality and the Public Utility Commission, although the PUC bill did not pass.

“Understandably, everything was on the table for discussion this session.  But it’s important to think long-term when considering actions that hamstring the pillars of the economy,” he said.  Bellsnyder described a manufacturing industry under duress.  “More than 100,000 Texas manufacturing workers 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 think proactively and strategically to kick recovery into high gear.”

“We look forward to working with the state’s leadership in the coming months to develop a long-range strategy to grow manufacturing here.  Even more so in challenging economic times, manufacturing matters in Texas,” said Bellsnyder, who described plans for a concentrated effort to expand manufacturing capital investment opportunities, tailor economic development programs, and increase focus on job training and skills development.

During the regular session, lawmakers failed to extend the Texas Economic Development Act (also known as Chapter 313), which allows school districts to offer tax incentives to attract economic development projects like Toyota in San Antonio and Caterpillar in Seguin.   Chapter 313 is set to expire in 2012, before the Legislature reconvenes. “We’ll lose jobs to other states once Chapter 313 expires,” said Bellsnyder. 

TAM is urging the new select committee on economic development created this session to review the state’s current economic development tools, to assess which perform and which don't, and to develop distinct economic development tools tailored for specific manufacturing interests.

“Under our current economic development programs, certain business sectors consume the majority of the economic development funding available, while creating relatively few jobs.  A revamped economic development toolkit would address this inequity and give consideration to projects that actually create jobs and create additional economic outputs in the economy,” said Bellsnyder. 

With the State’s continued dramatic shortage of qualified workers, TAM remains committed to expanding Career and Technology Education (CTE) programs, which combine academic content with practical workplace applications.  “We’ve made strides to integrate rigor, relevance and real world skills for today’s diverse student body,” said Bellsnyder.  “We hope lawmakers use the interim to develop strategies to fully invigorate CTE as an honorable option for students, beyond the token allowance it is today.  Rigorous career and technology education - with continued focus on Science, Technology, Engineering and Math (STEM) - will prepare today’s students to become tomorrow’s manufacturing workers.”

“Texas depends on a strong manufacturing job machine to maintain its status as the ‘strongest economy in the nation.’  Finding ways for manufacturers to generate investment, create jobs, and groom tomorrow’s workforce must be a priority.  We are committed to finding solutions that are mindful of today’s realities while safeguarding the state’s ability to prosper in the future,” said Bellsnyder.

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