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Texas has won the Gold Shovel Award for the 6th year in a row.

Governor Greg Abbott recently announced that Texas was awarded the Gold Shovel Award by Area Development Magazine for new job growth and business investments.

The annual award recognizes states that drive job creation and investment through business-friendly policies and improvements in infrastructure that attract new employers, as well as additional investments in expanding current operations.

This is the sixth time Texas has won the Gold Shovel.

As the Governor said, the Lone Star State has flourished because we allow innovation to take root and give businesses the opportunity to succeed.

Texas wrapped up the 1st quarter of 2018 with the fastest-growing economy in the U.S., boosted by a strong resurgence in the oil and gas space.

While the oil and gas industry rebounds, wind energy and other sources of clean and renewable energy are increasing.

While the oil and gas industry rebounds, wind energy and other sources of clean and renewable energy are increasing. Texas has more capacity to generate electricity from wind than any other state and leads in capacity under development.  Wind now provides almost 15% of the state’s total power needs on average, with a much higher proportion at some points in time.

That kind of economic diversity is critical for Texas’ future.

Another example. Texas has become a global life science and biotechnology powerhouse, employing more than 90,000 Texans in related fields and spawning leading health care institutions like the Dell Medical School right here at UT-Austin. The industry has seen about 10% annual employment growth since 2014.

On the subject of infrastructure, the high speed rail line connecting Dallas and Houston remains on track. Incredibly, it would be the first “bullet train” in the U.S. so it makes sense that Texas lead the way. The project will be built with private capital, not government money, and provide much-need additional mobility. When completed, you can make that 240 mile trip between our two largest metro areas in a mere 90 minutes.

Texas is leading the way with plans for the first “bullet train” in the country.

Finally, uncertainly remains around the impact of tariffs on U.S. and Texas companies. Some companies are making contingency plans to move certain manufacturing to places like Mexico and Panama since they have components on the US tariff list.

We’ll continue to watch closely the impact of tariffs on Texas business.

As we approach the 86th Texas legislative session starting in January of 2019, the Legislature will face the challenge of crafting a balanced budget that maintains our low tax policy, invests in roads and other infrastructure, and funds social services like our rapidly expanding Medicaid program.

An economy that continues to grow will be important to generate the necessary revenue.

I welcome your comments on our business climate and public policy priorities.  Find me anywhere online at Quorum Public Affairs.

 

 

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More than 300,000 jobs were created in Texas in 2017—the Texas jobs train rolls on!

Governor Greg Abbott recently released a “Report to the People of Texas” and there is good news.

More than 300,000 jobs were created in Texas in 2017.

And the hits keep coming. We led the nation job growth in February of this year, adding 40,500 jobs, continuing a 20-month growth streak, according to the Texas Workforce Commission. New York and Florida were a distant 2nd and 3rd.

Further, driven by a recovery in the energy sector, the Federal Reserve Bank of Dallas projected a statewide job growth rate of 3.4 percent for the year, up from 2.1 percent last year.

Gov. Greg Abbott recently released a “Report to the People of Texas.”

We are the top exporting state by far – our exports of $264 BILLION last year surpassed runner-up California by more than 50%!

Think about this.. The Texas economy is now the 10th largest in the world and we’ve had 92 consecutive months  — 7 ½ years — of job growth.

So how do we keep the train on track?

The Texas 2050 Coalition of major business, economic development groups and Chambers of Commerce has been working closely with state leaders like the Select Committee on Economic Competitiveness to keep our eye on the long-term.

The Committee released their report recently and had a primary theme: with global economic leadership at stake, education and workforce development are more critical than ever.  We must stress innovation in education for our Texas students, across multiple disciplines.

Other topics covered in the report that deserve emphasis include supporting our small businesses and entrepreneurs, “smart cities,” and incentives to compete.

We must stress innovation in education for our Texas students, across multiple disciplines.

Since we were also # 1 in population growth in 2017, we’ll need more infrastructure like roads but also broadband technology.  Any action by Congress for public-private partnerships to accelerate infrastructure development will likely require corresponding action by the Texas Legislature in 2019.

Austin, Dallas and other cities STILL anxiously await the decision by Amazon on HQ2.

Finally, Austin, Dallas and other cities STILL anxiously await the decision by Amazon on HQ2 – their second North American headquarters. While odds makers initially had Austin and Dallas in the top 5, Texas’ job just got tougher.  Get this.. the state of Maryland has offered Amazon 6.5BILLION in tax incentives and $2BILLION for transit improvements.  That may be hard to beat.

For more on the Committee’s findings or other policy matters find me online at Quorum Public Affairs; cc@quorumpublicaffairs.com; or 512-762-7366.

First, let me wish everyone a safe, joyful, and prosperous new year. In case you missed it, this new year of 2018 is noteworthy on several levels.

To name a few… 2018 is a Universal Year of “11”; it’s the Chinese Year of the Dog  (our two Labs, Sundance and Bear, were nonplussed at the news) starting Feb. 16; 2018 (MMXVIII) is a common year starting on Monday of the Gregorian calendar; and the 2018th year of the Common Era (CE) and Anno Domini (AD) designations, the 18th year of the 3rd millennium,

This is interesting.. Donald Trump, George W. Bush, and Bill Clinton were all born in a Dog year (1946). This is less interesting but may be useful at a dinner party – the Dog occupies the eleventh position in the Chinese zodiac, after the Rooster, and before the Pig.

2018 is designated as the third International Year of the Reef by the International Coral Reef Initiative, which may (or may not) have been inspired by Jimmy Buffett.

The 2018 Winter Olympics will be held in South Korea February 9-25 – and broadcast by our good friends at KXAN Austin (NBC) — and on July 27, Mars will make its closest approach to Earth since 2003 and presumably we can finally find the Russian monkey (and hopefully is the same size we left him).

Most significantly of all, February of 2018 marks the 23rd full year in business for Quorum Public Affairs.

“We Know Texas” from top to bottom, having spent 30 years in and around the public sector including work for two Texas Governors. When we started, we were ‘first in’ the new world of engaging grassroots citizens and opinion leaders to influence state and federal policy in Texas.

Today, Quorum continues to operate at the intersection of business, communications, and government in Texas; we build strategic relationships with public officials, influencers, business leaders and voter groups for companies doing business in Texas.

And 30 years gets you great relationships — our network is second to none.

It’s also true that since 1994 we’ve advocated, built coalitions and solved policy and regulatory challenges for companies and issue coalitions large and small, including venerable brands like: Allstate, AT&T, Advantage Capital Partners, Boeing, CBRE, Conoco Phillips, Dell, Ergo Genesis, Exxon-Mobil, Fed-Ex, Ford, Grant Thornton, LIN Media, Nationwide, Pfizer, Shell, State Farm, Smith’s Group, Top Golf, USAA, and Wal-Mart.

In 2017, we added new accounts like the National Governor’s Association; Corvel; Synexis; Cypress Equities; Battelle; Custom Technology Solutions; Fortium Partners; RSM; Energy Innnovation Partners; Viimed, CBRE, and others.

We stay closely connected to the business, economic development, and venture capital sectors via the Texas 2050 Coalition that we helped form and Governor Greg Abbott’s Texas Economic Development Corporation.

We remain a first call for companies re-locate or expand in Texas market with financial incentives and facilitating business alliances to aid their growth. Texas is investing in the companies, too, through the state’s Texas Enterprise Fund and other incentives.

In 2018, our interim legislative committees will be looking at issues across the board, with emphasis on a tax and regulatory environment that supports Texas’ competitive economic advantage in culture and cost; it’s a growth agenda and Texas continues to be a destination state.

Dell, Inc. is sponsoring our bi-monthly radio commentary on Texas public policy here: https://texasbusinessradio.com/

And my blog post commentary is here: https://quorumadvisor.wordpress.com/

If you’re a numerologist you know that the “11” represented by 2018 is a Master number and will bring a spotlight to the realms of love, diplomacy, leadership and individuality. It’s also a number representing “inspiration, illumination and enlightenment,” all of which we’re adding to our resolutions list.Another resolution is to keep doing what we do best: helping companies and coalitions navigate political, legislative, and regulatory challenges, build alliances and direct the right message to the right audience.

Don’t hesitate to reach out anytime if we can be a resource. All best wishes in the new year and I look forward to staying in touch.

Craig Casselberry

(512) 762-7366

The Texas Select Committee on Economic Competitiveness wrapped up their work last week after hearing testimony from over 30 witnesses about how to drive Texas job growth in the years and decades ahead.

The Alamo was the battleground for Texas independence.  During that battle, Col. William Travis famously hung a sign on a cannon that challenged the Mexican army to: “Come and Take It”

OK so they won that battle but the Texians endured to win the war.

Texas has led the country in job creation for much of the last 2 decades and judging by the testimony, Texas leaders are not ready cede that leadership role.

Witnesses included top Texas business leaders from industries like oil and gas, utilities, transportation, technology, higher education, as well as our elected leadership and state officials.

The overriding sentiment: with global economic leadership at stake, education and workforce development are more critical than ever.

The Texas 2050 Coalition of major business groups and Chambers of Commerce has been working closely with the Committee and offered the following recommendations:

1) Align public education with the workforce needs of Texas employers.

  • Provide students with multiple pathways to participate in a modern and evolving Texas economy and ensure that Texas students have pathways to high-growth STEM areas, graduate careers and college- readiness programs.
  • Address the shortage of qualified computer science, science, and math teachers leveraging model programs such as U-Teach.
  • Develop a sustainable pipeline of talent and expand access to computer science and computational thinking skills development in K -12.

2) Maintain a Rational Tax System

  • Texas’ lack of a personal income tax—one of only seven states without one—is a positive for entrepreneurial investment, small business, and corporate headquarters;
  • However, our heavy reliance on property and sales taxes in particular penalizes capital-intensive investment making Texas a higher tax cost state than our competitors;
  • Incentive programs—in particular, property tax abatements and the Enterprise Fund—are important to attract major job projects.

3) Maintain and Enhance Strategic Infrastructure

  • To remain competitive, Texas needs to increase and improve our infrastructure capacity – roads, energy, water, and broadband – to pave the way for smart cities and a growing population. The Legislature should champion policies that:
  • Support public-private partnerships to add infrastructure capacity more quickly.
  • Encourage state and regional investment in key infrastructure for the 21st Century, facilitating access to talent, technology, capital and know-how.

The Committee is expected to issue their report in early January.

Texas’ success in economic development and job creation did not happen by accident.

For the last two decades, Texas lawmakers have created a policy and regulatory climate built for competition and growth.  In turn, the entrepreneurial spirit of our innovators has flourished.

Texas should embrace regulatory policy that protects consumers and the environment without placing unnecessary strain on economic activity; stability and certainty are important for job growth.

Now is not the time to retrench when it comes to economic growth.

As the Committee heard from citizens across the state .. if Texas can strike a balance between business and policy that encourages innovation and fosters respect, we will to continue to lead the country in job creation and quality of life.

 

 

The fight is on in Texas and across the country for what the ubiquitous corporate giant Amazon is calling HQ2 — its 2nd corporate headquarters in the U.S.

And the purse will be enormous: about $5 billion in capital investment and 50,000 jobs with a six-figure average salary.  Add to that the potential to ‘cluster’ related technology jobs and it’s easy to see the reason for the frenzy.

Austin, Greater Dallas, El Paso, Frisco and Houston have submitted proposals;  Amazon is expected to make a decision in the 1st Q of 2018.

So.. what are the prospects for Texas in this competition for an economic whale?

Some are touting the Texas connections of founder Jeff Bezos. He spent his childhood in Houston while his dad worked for Exxon and his cousin is George Strait, who you may have heard sing some country and western tunes.

And..  Amazon already has about 20,000 employees in Texas who, we trust, can attest to the wonderfulness of the Lone Star State.

But in fact it’s mostly a business decision.

Attributes like workforce size and skill, location, and essential infrastructure will decide it, along with the tax and regulatory environment, economic development incentives, and workforce training and education.   Quality of life and other cultural and recreational amenities will be considered along with affordable housing, cost of living and the quality of the public schools.

Amazon’s RFP says, “the project requires a compatible cultural and community environment for its long-term success. This includes the presence of a diverse population, excellent institutions of higher education, local government structure and elected officials eager and willing to work with the company..”

This is likely the template for future large corporate expansions and re-locations and Texas generally stacks up well.

As we look ahead.. business and elected leaders are preparing for Texas’ future through emphasis on skills-based education and workforce development, infrastructure capacity (physical and virtual assets), ‘smart cities,’ access to capital for entrepreneurs, and tools (read: incentives) to stay competitive.

Texas will have stiff competition from other cities and sealing the deal will almost certainly include incentives and require a collaborative state-local effort.

In Texas that will include a package that includes the Texas Enterprise Fund (Governor Abbott) and local tax abatement and of course our pro-business, pro-growth policy climate.

The opening bell has rung on the Amazon deal.

How will this battle end?  Starting with a strong team led by Governor Abbott and great professionals throughout the regional and local economic development ecosystem, Texas has done it before and is well-positioned to do it again.

We can only hope Mr. Bezos doesn’t have any exes here.

The Texas Select Committee on Economic Competitiveness is meeting this week in Austin to “develop and present concrete principles on long-term competitiveness and economic development issues.”

The hearing will examine important factors for companies looking to re-locate to Texas or expand and add jobs here.

House Speaker Joe Straus has explained that two recent events were the catalyst for the Committee:  Hurricane Harvey and its billions of dollars in damage to Texas;  And, Amazon’s pursuit of a 2nd U.S. HQ offering value on a level that might negate Harvey’s damage.

Why is this important?  Texas is slipping – slightly – in economic development rankings.  We’ve fallen to #4 in the CNBC “best states for business” rankings, the first time in 11 years we haven’t been #1 or 2.  Granted, a major factor is falling oil and gas prices.. We remain # 1 in the country for workforce and infrastructure.

Many acknowledge our inherent advantages:  our natural resources in the energy space (oil and gas particularly of course , and now even wind and solar) and our people and that intangible –  entrepreneurial spirit.

But we’ve also done a great job of maintaining a pro-growth policy climate that includes reasonable regulations and relatively low taxes.

As the Speaker’s proclamation notes, Texas needs to make sure our approach to economic development over the long-term is appropriate for the private sector’s changing needs and demands in a global economy that is increasingly competitive.

The Committee will be exploring these areas:

  • Education and workforce development to ensure Texans and their employers have access to skilled workers
  • Infrastructure, including transportation, energy, water, utility and broadband to make sure we have the capacity to accommodate economic growth
  • Access to investment capital to help our young companies grow and stay in TX
  • Investments in innovation across the board (and including unnecessary regulations that would impede economic growth)
  • Existing and potential economic tools (read: incentives) to compete for and retain jobs
  • Tools and authority of local governments to attract new jobs
  • Look at examples of successful and unsuccessful attempts to attract companies to TX – what worked and what didn’t

Major Texas business interests are engaged in this effort.  A group called “Texas 2050” is looking closely at how Texas remains the best place for business and families for at least the next 30 years.

Here’s a fun fact: Texas needs to create 7.8 million new jobs by our bicentennial birthday (2036) to keep up with population growth. Wow..

Can we do it?  With a long-term, smart approach, of course.

The Select Committee meets next on Dec. 5 and is expected to issue a report with recommendations on Dec. 12.

Oh, and a shout-out to Dallas Mavericks owner and adopted Texan Mark Cuban who testified today and coined the “Destination for Excellence” phrase.  I am merely borrowing, which I hope he doesn’t mind. As an Arlington native I am, after all, a Mavericks fan.

For more information find me at Quorum Public Affairs or #ccquorum on Twitter.

Craig Casselberry

cc@quorumpublicaffairs.com

Texas Comptroller Glen Hegar announced this week that  Texas experienced its 14th consecutive month of job growth in August. Here are some numbers on the state of the Texas economy:

  • Employment rose by 2.5 percent for the year ending in August, more than double the rate from 2016.
  • Texas’ employment growth ranked first among states in year-over-year net change (+298,600) and fifth in percentage change (2.5 percent).
  • The trade, transportation and utilities category saw the biggest expansion, with 9,100 jobs gained from July to August;
  • Construction (2,600) and manufacturing (2,200) were second and third, respectively.
  • The latter’s 4.2 percent annual job growth rate was its largest year-over-year increase since March 2012.
  • The Federal Reserve Bank of Dallas noted recently that Texas’ second-quarter job growth rate was the state’s fastest since 2014

Of course these numbers don’t fully account for the effects of Hurricane Harvey; I’ve seen loss estimates of anywhere from $70-190B dollars in economic losses.   As much as 31 percent of total U.S. refining capacity  — much of it in Houston  — was either been taken offline or reduced dramatically because of Harvey, according to CNBC.

Railroad Commissioner Ryan Sitton, though, says that while some refineries did shut down or operated at reduced capacity due to flooding, our energy infrastructure is recovering quickly;  most refineries have now come back online and more than 40,000 Texas men and women are headed back to work.

On the state budget front.. unless oil prices rebound dramatically the next fiscal year state budget (2019-2020) is going to look a lot like the current one; that is, very tight. Particularly given the increasing pressure that Medicaid is applying to state spending.

The Texas business community and our elected leaders will need to be engaged on that subject and even get creative when it comes to economic development – whether its creating a vibrant domestic venture industry here in Texas or landing major deals like the 2nd Amazon HQ’s; their decision is expected in 1st Q of 2018.

On the subject of Harvey, Governor Greg Abbott has said the the state won’t tap into the Rainy Day Fund to help with Hurricane Harvey recovery efforts until the next legislative session—if it uses any of the $10 billion at all.  Houston is expected to tap so-called “Tax Increment Reinvestment Zones” to cover costs.

The state has already given $100 million to Houston to help clean up debris.

None of this is slowing down Texas growth in the near term.  In recent months Governor Abbott has announced major projects with companies like Charles Schwab, Pei-Wei, McKesson, Formosa Plastics, and Boeing.

And one federal note with potential impact on Texas ..  Tax reform proposals being considered by Congress could be a tremendous boon to Texas and the U.S. economy.

Companies who have stockpiled cash overseas could bring that money home and pay a one-time ten percent (10%) tax on that money instead of the 35% corporate rate that would otherwise apply.

The repatriated money could be used on share buybacks, dividends, acquisitions, or capital spending.

Companies with a significant Texas presence would be affected – Apple, Caterpillar, Google, and Oracle have significant cash holdings overseas that could be liberated and spent here at home.

And finally.. most new state laws went into effect on September 1.  If you need information, be in touch.

Craig Casselberry

(512) 762-7366