The government should not pick winners and losers with taxpayer dollars.
The Problem
Texas has built a reputation as a pro-growth state based on broad tax policy and regulatory predictability. Yet in recent decades, lawmakers have increasingly relied on targeted incentive programs, industry-specific grants, and dedicated funds to influence economic development.
Programs such as film incentives and economic development grants redirect tax revenue to favored sectors, often through funds established outside the state treasury or insulated from ordinary appropriations discipline. These programs shift private risk onto taxpayers. They allow the government to determine which industries merit support, rather than allowing markets to allocate capital.
Corporate welfare rarely shrinks government. Instead, it adds new baseline commitments that persist long after initial political justification fades.
Why It Matters
Free enterprise depends on neutral rules applied evenly. When the government selects beneficiaries through targeted incentives, it distorts competition and encourages political rent-seeking.
Subsidy regimes also reduce transparency. Dedicated funds and off-treasury accounts make it more difficult for taxpayers to track long-term obligations and evaluate tradeoffs. Over time, these programs expand expectations of government intervention and weaken fiscal discipline.
Economic growth in Texas has historically been strongest when driven by broad-based policy rather than preferential arrangements.
What Reform Requires
- Prohibiting the creation of new industry-specific subsidy programs
- Subjecting existing incentive funds to rigorous sunset review
- Eliminating dedicated off-treasury accounts that bypass appropriations discipline
- Prioritizing broad tax relief over targeted economic incentives
- Ensuring transparency and legislative oversight for all incentive programs
The government should create a fair playing field, not select favored participants.
