Abbott Touts Bristol Myers Squibb Deal Backed by Corporate Welfare

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Texas Gov. Greg Abbott (R) announced Monday that Bristol Myers Squibb, one of the world's largest biopharmaceutical companies, will invest approximately $2.3 billion in a new pharmaceutical manufacturing campus in Houston. The project is expected to create nearly 500 permanent jobs and expand Texas's growing life sciences sector.

The investment itself is good news for Texas. The corporate welfare attached to it is not.

Bristol Myers Squibb received a $4.89 million grant through the taxpayer-funded Texas Enterprise Fund (TEF). A subsidiary is also moving through the state's Jobs, Energy, Technology, and Innovation program, better known as JETI, with a proposed property tax incentive that state records estimate at more than $29 million.

The two programs work differently. One provides a direct government grant. The other can substantially reduce the taxable value of qualifying property. Together, however, they illustrate the same problem with Texas economic development policy.

State leaders routinely argue that Texas attracts investment because of its workforce, infrastructure, relatively lower operating costs, access to markets, and business climate. Abbott cited many of those advantages while celebrating the Bristol Myers Squibb announcement. Yet Texas continues to spend taxpayer money and offer preferential tax treatment to convince selected companies to invest here.

The question is not whether Texas should welcome Bristol Myers Squibb. It should. The question is why taxpayers should have to help pay for the privilege.

Bristol Myers Squibb Plans $2.3 Billion Houston Investment

Bristol Myers Squibb plans to build an approximately 600,000-square-foot manufacturing campus at Generation Park in Houston. The company says the facility will initially employ nearly 500 people in production, engineering, maintenance, quality control, administration, and other fields. The campus will manufacture several types of medicines, including small molecules, biologics, and antibody-drug conjugates. Its modular design is intended to allow production capabilities to expand as Bristol Myers Squibb's pharmaceutical pipeline develops.

The Houston project is also part of a much larger company strategy. Bristol Myers Squibb has committed to investing $40 billion in the United States over five years in research and development, technology, and domestic manufacturing.

The company said it selected Texas following an extensive evaluation of multiple markets in the central and eastern United States. Its decision included consideration of Houston's emerging life sciences workforce, proximity to utilities and transportation infrastructure, available incentives, and the state's overall business climate.

Gov. Abbott similarly pointed to Texas's economic advantages in announcing the project.

"This $2.3 billion investment by Bristol Myers Squibb in the dynamic biotech ecosystem in Houston is a testament to the depth of our skilled workforce and the pipeline of talent coming through our nation-leading technical colleges and research universities."

Those are legitimate competitive advantages, and Texas should continue cultivating them. They also raise the question of why taxpayers must supplement those advantages with millions of dollars in government incentives.

Texas Enterprise Fund Adds a $4.89 Million Subsidy

Bristol Myers Squibb will receive a $4.89 million grant through the Texas Enterprise Fund, one of the state's primary corporate incentive programs. Created by the Texas Legislature in 2003, the TEF is explicitly described by the Governor's Office as the state's "deal-closing" fund. It is intended for situations in which a Texas community is competing against at least one viable out-of-state location for a project involving new jobs and investment. Companies apply through the Texas Economic Development and Tourism Office, but TEF awards ultimately require the unanimous approval of the Governor, Lieutenant Governor, and Speaker of the Texas House. Applicants must meet requirements involving interstate competition, job creation, wages, capital investment, and local economic incentives.

The state also has safeguards intended to protect taxpayers. Applicants undergo an 11-step due diligence process, and the Governor's Office uses an analytical model intended to project a full return on the state's investment through estimated future sales tax revenue generated from new wages. Grant recipients enter contracts establishing job and wage requirements, with clawback provisions available when companies fail to meet their obligations.

Those safeguards are relevant, but they do not answer the more fundamental question. Even if a TEF recipient satisfies every contractual obligation and produces the return projected by the state, government is still taking taxpayer resources and directing them toward private businesses selected for assistance. A government program can meet its performance metrics and still represent an inappropriate intervention in the marketplace.

Nor is the Bristol Myers Squibb award an isolated case. According to the state's 2025 legislative report, TEF had funded 213 projects and awarded approximately $878.4 million through the end of 2024. Those projects were associated with commitments for 127,615 direct jobs and approximately $64.46 billion in capital investment.

The program has operated for more than two decades and subsidized projects involving some of America's largest corporations. Bristol Myers Squibb is simply its latest beneficiary. Texas's reliance on corporate incentives extends well beyond TEF and has evolved considerably over the past several decades.

Bristol Myers Squibb Could Receive a $29 Million JETI Tax Incentive

The TEF grant is only part of the government's involvement in the Houston project. A Bristol Myers Squibb subsidiary, E.R. Squibb & Sons, is also moving through the Texas Jobs, Energy, Technology, and Innovation program, better known as JETI, in conjunction with Sheldon Independent School District.

The history of the program is noteworthy.

During the 87th Legislature in 2021, lawmakers declined to renew the controversial Chapter 313 economic development program, which allowed school districts to offer qualifying businesses limitations on the appraised value of property for school property tax purposes. Chapter 313 subsequently expired at the end of 2022. The reprieve was short-lived.

When lawmakers returned to Austin for the 88th Legislature in 2023, they enacted House Bill 5 (HB 5), creating JETI as a new economic incentive program. The Texas Comptroller has explicitly described JETI as the successor to Chapter 313. While lawmakers made changes to eligibility, job requirements, and other provisions, the new program retained the basic concept of using limitations on taxable property value to attract selected economic development projects. In effect, Texas lawmakers allowed one major property tax incentive program to expire and then created its successor during the very next regular legislative session.

Under JETI, qualifying companies, school districts, and the Governor's Office can enter into agreements limiting the taxable value of eligible property for school district maintenance and operations property taxes. The standard agreement provides a 50 percent limitation for 10 years, while qualifying projects in Opportunity Zones can receive a 75 percent limitation.

According to the Governor's Office's July 31 listing, the Bristol Myers Squibb application contemplates a 50 percent limitation and an estimated $29.19 million JETI incentive. The original application lists $1 billion in capital investment and 489 total jobs. Those figures predate the company's final announcement, which now puts the Houston investment at approximately $2.3 billion and employment at nearly 500 permanent jobs.

There is also an important distinction in the project's current status. The state's July 31 report lists the Bristol Myers Squibb application among JETI projects that have been approved and are negotiating, rather than among projects with finalized contracts. The estimated $29.19 million incentive should therefore not be treated as money already received or a finalized tax agreement. Still, the proposed agreement exposes a larger contradiction in Texas tax policy. Lawmakers had an opportunity when Chapter 313 expired to move away from targeted property tax incentives altogether. Instead, one session later, they returned to the same basic economic development philosophy under a new program.

That makes the Bristol Myers Squibb application more than a question about one pharmaceutical company receiving preferential tax treatment. It is an example of a policy approach Texas lawmakers deliberately chose to revive after allowing its predecessor to die.

JETI Gives Selected Businesses Property Tax Relief

Texas policymakers are effectively acknowledging through JETI that property taxes can affect where companies invest enormous amounts of private capital.

They are correct. The problem is how they have chosen to respond.

Rather than broadly reducing the property tax burden, JETI allows government to determine which qualifying projects receive preferential treatment. Homeowners and ordinary businesses remain subject to the broader property tax system while selected companies can negotiate agreements substantially reducing the taxable value of qualifying property. If property taxes are an impediment to a multibillion-dollar pharmaceutical investment, they are also an impediment to the homeowner, small business, manufacturer, retailer, farmer, and entrepreneur who receives no JETI agreement.

That does not mean JETI should simply be extended to everyone. It means lawmakers should confront the tax and spending burden that makes these incentives attractive in the first place.

The scale of the program is already significant. As of July 31, the Governor's Office reported 12 contracted JETI projects representing approximately $17.9 billion in capital investment and an estimated $547.1 million in incentives. Another 16 projects, including the Bristol Myers Squibb application, were approved and negotiating. Collectively, those projects represented nearly $127 billion in proposed capital investment and more than $2 billion in estimated incentives.

JETI is therefore no minor exception to Texas tax policy. It is becoming a substantial component of the state's economic development strategy.

Texas Corporate Welfare Creates Two Sets of Rules

The Bristol Myers Squibb deal demonstrates two different ways government can intervene in the market.

Through the TEF, state government spends taxpayer money on selected private investments. Through JETI, government offers selected projects preferential treatment under the property tax system. The mechanisms differ, but both abandon the principle of neutral rules applied broadly.

There is also nothing unusual about Bristol Myers Squibb accepting these incentives. Companies have every reason to consider available grants and tax advantages when determining where to invest billions of dollars. The responsibility for corporate welfare rests with the policymakers who create, fund, and administer the programs.

The argument against corporate welfare should not depend on whether Bristol Myers Squibb is sufficiently profitable, whether its investment is desirable, or whether its executives should have declined government incentives. The policy problem exists because government has placed itself in the position of deciding which private investments merit taxpayer assistance.

Texas should not need government officials to make those decisions.

Texas Should Compete Without Corporate Welfare

Supporters of the TEF and JETI can reasonably argue that Texas competes with other states that offer aggressive incentive packages of their own. A state that refuses to participate risks losing projects to governments willing to offer grants, abatements, and other benefits. But accepting that premise creates an endless competition over which government can assemble the most attractive package.

Companies respond rationally by seeking incentives. State and local governments face political pressure to offer them. Elected officials then point to the resulting investment as evidence that the incentive programs are necessary. Texas should compete differently.

The state's economic development strategy should be built around making Texas attractive to every investor, not merely those large enough to negotiate an agreement with government. That means controlling government spending so taxes can fall. It means eliminating unnecessary regulations that raise the cost of doing business. It means protecting private property, maintaining reliable infrastructure, developing a competitive workforce, and allowing capital to flow according to market signals rather than political decisions.

Those reforms do not require government to decide which company deserves assistance. They make Texas more competitive for everyone.

Texas Lawmakers Should End Corporate Welfare

The Bristol Myers Squibb announcement should ultimately be understood as two separate stories.

The first is a story about private investment. A major biopharmaceutical company wants to invest approximately $2.3 billion in Houston, build substantial manufacturing capacity, and employ hundreds of Texans. That is worth celebrating.

The second is a story about government policy. Texas has agreed to provide a $4.89 million taxpayer-funded grant, while a Bristol Myers Squibb subsidiary is pursuing a property tax agreement with an estimated incentive value of more than $29 million. That deserves scrutiny.

The Texas Legislature created both programs. It continues appropriating money for the TEF and established JETI only three years ago. Lawmakers can choose a different approach. Texas should phase out corporate welfare programs, restrain government spending, eliminate unnecessary regulatory barriers, and pursue broad tax reductions rather than allowing government to determine which companies deserve preferential treatment.

This is also why ending corporate welfare is an explicit component of the Texas Liberty Compact advanced by Texas Policy Research (TPR). The Compact calls on Texas lawmakers to eliminate corporate welfare and reject policies that use taxpayer resources to favor particular businesses, industries, or economic interests. The alternative is not for Texas government to become better at choosing which companies deserve incentives. It is to create an economic environment in which government does less choosing altogether. Texas should restrain spending, reduce taxes, eliminate unnecessary regulations, protect private property rights, and allow businesses to compete on a level playing field. That approach would benefit far more than the companies capable of securing economic development agreements. A small business should not have to compete with a corporation receiving government assistance, and a Texas property owner should not face the full burden of a tax system from which government selectively provides relief to favored projects.

The Bristol Myers Squibb announcement illustrates precisely the problem the Texas Liberty Compact seeks to address. Texas should welcome billions of dollars in private investment without requiring taxpayers to subsidize it.

Ending corporate welfare would also align state policy with the stated position of the Republican Party of Texas. Plank 83 of the party's 2026 platform, titled "No Corporate Welfare," opposes subsidies for public and private businesses and rejects "special treatment or tax breaks for favored industries or companies." More specifically, it calls for the repeal or sunsetting of existing subsidies and special-interest tax exemptions, expressly naming the Texas Enterprise Fund. It also calls for repeal of Chapter 403.601 of the Texas Tax Code, the statutory framework governing JETI.

The disconnect is particularly notable because Republicans are not powerless to implement that position. The party has controlled both chambers of the Texas Legislature and every statewide elected office for more than two decades, dating back to 2003. The TEF itself was created that same year, and when Chapter 313 was allowed to expire at the end of 2022, the Republican-controlled Legislature replaced its underlying approach the following session by creating JETI. The result is a significant gap between the party's stated principles and the policies maintained by the officials elected under its banner. The 2026 platform does not merely express a vague preference for smaller government. On corporate welfare, it specifically identifies programs the Texas government continues to operate and calls for their elimination. With Republicans possessing the governing majorities necessary to change those policies, the question is less whether Texas can end corporate welfare than whether lawmakers are willing to do so.

And when policymakers recognize through JETI that property taxes discourage major private investment, they should apply that lesson more broadly.

End Corporate Welfare and Eliminate Texas Property Taxes

Texas does not have to choose between welcoming Bristol Myers Squibb and opposing the incentives attached to its investment. The state should want the company here. It should want the jobs, manufacturing capacity, economic activity, and billions of dollars in private investment that come with it. But Texas should compete for those investments by being freer, less regulated, less expensive, and less burdensome than other states, not by making government increasingly sophisticated at negotiating special deals.

If Texas taxes are too burdensome for major companies considering where to invest, lawmakers should lower them. If regulations make investment unnecessarily difficult, lawmakers should eliminate them. If government spending makes meaningful tax reductions difficult, lawmakers should spend less. And if property taxes discourage investment and make property ownership more expensive, Texas should work toward eliminating them rather than deciding which taxpayers deserve an escape hatch.

The goal should not be lower taxes for the politically favored. It should be lower taxes for everyone.

Texas should welcome Bristol Myers Squibb's $2.3 billion investment. It should also end the corporate welfare that came with it.

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