Along with the huge job growth, the state has the third-highest proportion of hourly jobs paying at or below minimum wage. And despite its low level of unemployment, Texas has the 11th-highest poverty rate among states.
“While economic development is the mantra of most officials, there’s a question of when does economic development end and corporate welfare begin,” said Dale Craymer, the president of the Texas Taxpayers and Research Association, a group supported by business that favors incentives programs.
In a state that markets itself as “wide open for business,” the lines are often blurred between decision makers and beneficiaries, according to interviews with dozens of state and local officials and corporate representatives. The government in many instances is relying on businesses and consultants like Mr. Ryan for suggestions on what incentives to grant and which companies should receive them, as well as on other factors that directly affect public spending and budgets, the interviews show.
Mr. Ryan does not claim to be neutral on where the money should go. “It’s widely known that I represent a lot of taxpayers,” he said in an interview. “I have client relationships with people who hopefully, if they invest in Texas, they’ll receive incentives.”
Granting corporate incentives has become standard operating procedure for state and local governments across the country. The Times investigation found that the governments collectively give incentives worth at least $80 billion a year.
The free flow of tax breaks and subsidies in Texas makes it particularly fertile ground to examine these economic development deals and the fundamental trade-off behind them: the more states give to businesses, the less they have available in the short term to spend on basic services, a calculation made more stark by the recession.
To help balance its budget last year, Texas cut public education spending by $5.4 billion — a significant decrease considering that it already ranked 11th from the bottom among all states in per-pupil financing, according to recent data from the Census Bureau. Yet highly profitable companies like Dow Chemical and Texas Instruments continue to enjoy hefty discounts on their school tax bills through one of the state’s economic development programs.
In the Manor school district, which comprises the town and part of Austin, Samsung has been awarded more than $231 million in incentives from state and local officials. But the recent budget cuts have left the district with crowded classes and fewer programs.
Mr. Perry, who took office at the end of 2000, has been a longtime proponent of lowering taxes. He said in an interview that companies could put the money to better use than the government and would spend it in ways that would create jobs and help Texans.
“Facebook, eBay, Apple — all of those within the last two years have announced major expansions in Texas,” Mr. Perry said. “They’re coming because it is given, it is covenant, in these boardrooms across America, that our tax structure, regulatory climate and legal environment are very positive to those businesses.”
He acknowledged that the state’s job growth was not erasing persistent poverty, saying that “we are going to have people that fall through the cracks.” He said creating jobs was the best way to help Texans, who “don’t want government assistance when they can do it themselves.”
But relying on companies does not always turn out well. When Amazon set up a distribution center outside Dallas, it received incentives from the state. Six years later, when the company got into a tax dispute with the state, it shut the warehouse, which employed as many as 2,000 people during its peak season.
Nationwide, a whole industry of consultants has grown up around state efforts to lure companies with incentives. Companies like Ernst & Young, Deloitte and Automatic Data Processing, a payroll company, have divisions dedicated to helping companies search for the best deals.
Mr. Ryan’s Dallas-based firm, Ryan LLC, operates in 27 states and seven countries and represents numerous Fortune 500 companies. Texas alone is a big source of business for Mr. Ryan, who has won tax refunds of more than $20 million each for ExxonMobil and Raytheon. This year, he sought similar amounts for Verizon, Freescale Semiconductor and several other companies, according to state documents obtained through an open records request.
At the same time, Mr. Ryan has become one of the state’s most generous political donors. He co-founded a political action committee last year that supported Mr. Perry’s bid for the Republican presidential nomination and donated $250,000.
Even as business leaders press local governments to give out more incentives, they warn against requiring too much in return.
In Travis County, which includes Austin, commissioners recently passed new rules for companies that receive tax abatements. One requires paying employees $11 an hour, an amount the county considers to be a living wage.
The rules had been contested by the business community. “The more stipulations you put into an agreement, the more complicated it becomes and the less competitive we become,” Gary Farmer, a local business leader who runs an insurance company, told the county commissioners at a hearing. “We’re concerned about including a living wage into the policy, as we believe that could have a chilling effect on certain companies.”
When Mr. Perry became governor in 2000, Texas was not a major player in the incentives game. He quickly got his first taste during a bidding war among states when Boeing was hunting for a new location for its headquarters.
Texas ultimately lost to Illinois, which awarded Boeing $52.5 million in incentives, but the episode was a turning point. “We came back in here after we lost that,” Mr. Perry said, “and we analyzed our economic development efforts, and that’s when we started making some changes.”
Mr. Perry got the money flowing through two new cash funds created to recruit businesses. One, the Texas Enterprise Fund, awarded more than $410 million over eight years, according to the governor’s office, and the recipients said they would create more than 54,000 jobs. The fund requires companies that do not meet their job targets to return incentive money.
The arrest of a Baltimore blogger this weekend showed how a normally mundane bit of police work — the serving of a warrant — can be complicated in an age of Twitter and Internet radio. It briefly put a national spotlight on what normally wouldn't even make the local news.
Frank James MacArthur, 47, a steady presence as an observer at city crime scenes and a cab driver by trade, took to Twitter and an online radio service to stream his dealings with police at his home Saturday to execute an arrest warrant connected to 2009 weapons charges for which he had received probation before judgment.
A spokesman for the Maryland Department of Public Safety and Correctional Services confirmed that MacArthur was being held without bond, after being taken into custody late Saturday.
MacArthur's case tested the standard approach for crisis negotiators who aim to contain a situation, cutting off the subject from outside voices, something that was easy to do in the era of land line phones but much harder now, when almost anyone can get involved in the dialogue between police and a suspect.
"You don't want this person communicating with a lot of outside people who are going to get them riled up," said Justin P. Borowsky, who has studied the relationship between hostage takers and negotiators. "Social media is going to undermine the officer's ability to do that as effectively as police have been able to do in the past."
Police said they serve dozens of warrants a week. Taking MacArthur into custody should have been routine, but in the days leading up to his eventual peaceful arrest, he had been using threatening language toward police online and suggesting that he would not go quietly.
"Poor guy I take out might have a family. He probably just following orders..." MacArthur posted as police approached his Waverly home.
Police were cautious carrying out the job Saturday night and confirmed Sunday that they had found a sawed-off shotgun and ammunition at MacArthur's home. Police also said they are recommending new gun possession charges because MacArthur is disqualified from owning firearms following a 2002 weapon conviction.
With a helicopter watching the situation unfold from above, police sent in a SWAT team and closed down the block of McKewin Ave. where MacArthur lives. For his part, the blogger took to an online radio platform he has been using in recent weeks and streamed live his conversation with a police negotiator, making public what is usually a private conversation in which an officer tries to build a rapport with his subject.
Francesco Baschieri, chief executive of Spreaker, the radio platform, said at the peak of MacArthur's broadcast 1,000 were tuned in and a total 10,000 people heard at least part of it. Late Saturday, the MacArthur case was a trending topic nationally among on users on Twitter. At one point, he exchanged Twitter messages with CNN commentator Roland Martin who urged him to give himself up.
MacArthur has complained online about the effectiveness of the Baltimore Police, and questioned its use of resources, but his hours-long standoff consumed police resources on a night when two people were shot elsewhere in the city.
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