Last weekend Austin was the site of a Formula One (F1) racing event which the state worked hard to get since 2007 when the first race of its kind was held in the US. The Circuit of the Americas track (estimated cost $400 million) is hoped to pump $200-300 million into the Texas economy, but here’s the yellow flag causing the state to proceed with caution. The Comptroller of Public Accounts (Texas’ chief tax collector and accountant) Susan Combs agreed to provide financial support to the builders of $250 million over the next ten years in the event that the track does not turn a profit. That means the track was built without any tax incentives or tax subsidies. What’s the difference? Incentives are part of the tax code designed to encourage a certain type of behavior. Investors might be given a reprieve from paying property taxes for a certain period of time to encourage them to invest in a project. Subsidies are an outright grant of money by the state to assist an enterprise deemed advantageous to the public (so it’s like a loan you do not have to re-pay). Here the state did neither—instead, Combs agreed to defray the costs of building the F1 before the city of Austin had signed off to give tax incentives on the deal which is required under Texas law. That means Texans will pay for the 2012 race to the tune of about $25 million from the Major Events Trust Fund (a fund specifically designed to promote economic development). Tea Party conservatives and newly elected freshmen legislators are not ready to give the go ahead and want to re-visit the issue because they are concerned about Combs’ decision to fund the project without sufficient funding to do so.
One program that did get a green flag by the State Attorney General was the for-profit medical school—the American University of the Caribbean—which requested authorization to allow foreign medical students to complete their coursework and residency in Texas. Greg Abbot’s Attorney General opinion—a written opinion interpreting a legal provision requested by a public official—found that the Texas Higher Education Coordinating Board could allow foreign students to work in Texas hospitals. Some are concerned that these students will take slots needed by Texas students, or that the students will take up residency here after graduation. The medical school requesting the exemption argues that 60% of its graduates practice in primary care specialties and 50% practice in under-served areas, two areas that have the biggest shortages in doctors.
Finally, Hope Andrade—the state’s first Latina Secretary of State in Texas announced that she was resigning this week—an unusual move given that she serves at the pleasure of the Governor. This is one of the few positions the Texas Governor can appoint and remove, and typically someone does not leave the office until the end of the governor’s term. One of the office’s key areas of authority is over statewide elections, and Andrade has served for five different cycles. The most likely reason why she is stepping down involved the furor over her letter sent to Texas residents designated as “deceased” by Secretary’s office in advance of the 2012 presidential election. Unfortunately, many of the letter recipients were still quite alive and not happy they were being removed. Looks like Andrade got the checkered flag herself.
Lone Star News Review 