Supply chain issues continue to be a challenge for industry and in turn, consumers.
They have led to shortages of essential goods and staggering inflation. Global events, including the pandemic, war in Ukraine and Chinese aggression toward Taiwan add stress to the supply chain and the economy. The price of natural gas is at its highest level in 14 years. Americans are paying more for necessities as rapidly rising interest rates erode consumer confidence.
This may seem out of our control, but there are actions we can take at the state level to help protect Texas and America from these economic woes. Texas can act to reverse the trend of moving American manufacturing and jobs overseas.
The pandemic spotlighted the need for domestic manufacturing independence. Prior to the pandemic, it was easy to take the global supply chain for granted. But shortages of items as basic as medicine, food, paper products, PPE, oil and gas, microchips and auto parts revealed just how tenuous the global supply chain can be. And winter storm Uri revealed the need to incentivize new thermal electric generation capacity to ensure greater reliability of our power grid.
Texas and America must never depend on other countries for basic needs. That is why it is important to incentivize the next wave of manufacturing, energy generation and strategic production of everyday goods at home. Texas has unparalleled infrastructure that includes land and water transportation, an educated and skilled workforce, and a fair and pragmatic regulatory environment. But Texas also has the fourth highest property tax rate in the country, making capital investment very expensive.
For the past two decades, Texas relied on the Texas Economic Development Act to incentivize businesses to build and grow in Texas. It helped spur the Texas Miracle, which contributed to Texas becoming the tenth largest economy in the world.
The incentives provided by the program attracted world-class investments from companies including Samsung, Apple, Toyota, GM and Tesla, as well as over $70 billion in new petrochemical investments across the Lone Star State.
The program, however, lacked transparency, leaving taxpayers frustrated.
Consequently, the state's Economic Development Act will end on December 31st. Instead of renewing or replicating the same flawed program, we need a modern and transparent incentive program that provides a temporary tax discount to attract investments and jobs. Other states and nations are competing to land these large manufacturing projects and Texas must have a competitive economic development program to stay on top.
This upcoming legislative session we have a unique opportunity to develop a pro-taxpayer, pro-jobs program that incentivizes a manufacturing, technological, energy and healthcare renaissance in Texas to secure our future for generations. It is important for us to support the Legislature in creating a new program focused on the current opportunities for business growth and job creation while prioritizing America's critical infrastructure. Instead of being dependent on others for our essentials, we can put ourselves in a position to meet our own needs and provide for others. Texas is the nation's economic leader, and we must take the lead to usher in a new era of independence and self-reliance.
For more information, visit texaschemistry.org or acit.org, or call (512) 646-6400.
