AUSTIN (AP) — Top aides to Gov. Rick Perry said Thursday that it would be unwise for the next Texas governor to uproot lucrative taxpayer-footed business funds that are legacies of Perry’s 14 years in office but have become less popular among Republicans.
Their defense coincided with another of Perry’s out-of-state trips to lure more companies to Texas, this time in New York.
With just eight months left in office, Perry’s office is making a renewed case for two pet programs that have given a combined $600 million to small startups and restless businesses as his possible successors question whether the state has gotten its money’s worth.
The Texas Enterprise Fund will run out of money to hand out by next year unless replenished, said Jonathan Taylor, the director of economic development in Perry’s office. The Emerging Technology Fund has also been impacted by a waning financial commitment from the Legislature’s budget-writers in recent years.
Perry aides testified Thursday a Texas House committee that was considering what might happen if the next governor didn’t embrace the programs.
“You have to take into account not just cutting your losses, but cutting your winnings,” said Terry Chase Hazell, who manages Perry’s tech fund.
Republican Attorney General Greg Abbott, the favorite to replace Perry, has signaled unease with the funds while echoing a growing conservative mantra that the state shouldn’t be picking winners and losers in business. Democratic gubernatorial candidate Wendy Davis authored a Senate bill last year that mandates the first audit of the Enterprise Fund since it launched in 2003.
State Sen. Dan Patrick, the front-runner to become lieutenant governor, has proposed doing away with both funds entirely.
The House Economic and Small Business Development Committee didn’t broach the idea of completely dismantling the programs after Perry’s gone, but seemed interested in what might happen if control of the funds was moved outside the governor’s office.
Taylor indicated that would put the state at a disadvantage when trying to close deals.
“There’s something to saying, ‘I represent the office of the governor in the state of Texas,'” Taylor said. “You get to talk to decision-makers that way.”
The Enterprise Fund is responsible for 71,000 direct hires in Texas and another 228,000 indirect jobs, Taylor testified. The most recent state report puts the tech fund’s worth at $30 million above what the state has invested in private startups since 2006.
But there are signs that lawmakers are growing weary of the state playing venture capitalists. The $50 million in new money the Legislature gave the tech fund last year was only about one-third of what Perry sought.
Republican state Rep. Jason Villalbla questioned whether the advisory panels that screen tech fund applicants have the knowledge to make the best recommendations. The final decision is in the hands of the governor, lieutenant governor and House speaker.
“Those folks aren’t venture capitalists,” Villalaba said.
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