The general reception by the community has been one of applause for the action taken by the Brownwood City Council at last week’s council meeting. Council members approved an incentive package for the 3M plant of up to $400,000 over five years. The council ratified an earlier action of the Brownwood Economic Development Corpora-tion in approving the incentive.
The incentive will assist 3M in upgrading technology and the development of the Specialty Products Manufacturing in the Brownwood plant. Specifically, the incentive provides $2,500 for each new full-time equivalent job created, capped at $80,000 per year for five years beginning Nov.1, 2010. The local manufacturing plant has been one of three large manufacturing employers in the community that has contributed greatly to the financial stability and security of the Brownwood area. The upgrade in technology and the installation of a new production line to replace a 30-year old product line suggests that will be the case for the years to come.
I found it interesting following first the action by BEDC, and then the formal ratification by council, that I have not heard any negative comments. The same cannot be said about the commentary that surrounded the wave of incentive packages offered in response to the economic recession at the national level. Perhaps, it is the language being used; incentive does not seem to carry the same negative connotation and volatility as bailout. While that may play a part, I suspect it has more to do with how close we are to the action taken. Local government initiatives that aid local companies and provide local jobs for our friends and family tend to be understood better, and garner a warmer reception from tax payers.
Texas Gov. Rick Perry postured publicly that the state would first not accept the federal stimulus money and then said that his administration would have preferred not to take it. However, the records show that however much he did not like the smell, the federal stimulus money certainly helped the state balance its budget. Back in June when the governor signed the state’s balanced budget he also noted that lawmakers had left the state’s Rainy Day Fund untouched.
Some people credited the conservative fiscal leadership of Perry for balancing the budget. While the governor did veto nearly $300 million in spending which helped hold the line, it was the $12.1 billion in stimulus funds that really saved lawmakers from having to make drastic cuts in the budget. It is estimated if it were not for the stimulus funds, that accounted for nearly 7 percent of the budget, perhaps as much as half of the rainy day fund would have had to been used.
States and municipalities continue to see a decline in sales tax receipts as a result of the recession. At the state level, the decline in revenue has been met by an increase in expenditures particularly in unemployment benefits as the unemployment rate continues to inch upward. Whatever the infusion of government money is called, and how well it has worked, I think it is becoming clear that at the national level attention must be turned to the enormous debt that the emergency actions of the government has created. As the economy recovers and interest rates begin to rise, the cost of borrowing is going to increase, and even at today’s low rates the interest on the debt is incredible.
In the days ahead, candidates will be vying for the public’s support for governor and positions in Congress and the state Legislatures. The challenges left behind by the extraordinary measures taken during the economic crises are formidable and they will require decision-makers who have the best interests of Texas and the country as their only priority.
Robert Brincefield is vice president and publisher of the Brownwood Bulletin. His column appears on Sunday. He may be reached by e-mail at email@example.com.