April 6, 2006
The Honorable Rick Perry
State of Texas
Capitol Building, Room 2S.1
Austin, Texas 78701
Dear Governor Perry:
This week Vought Aircraft Industries (Vought) announced the elimination of 600 jobs at Vought’s Dallas and Grand Prairie manufacturing plants. As you know, in April 2004 you paid $35 million through the Texas Enterprise Fund to Vought in exchange for its pledge that it would create 3,000 new jobs in Texas by 2009. These funds come directly out of the pockets of Texas taxpayers.
As the State’s chief fiscal officer, I am gravely concerned about the absence of meaningful oversight over the process by which these grants to Vought and other recipients are awarded, and the meager accountability that exists where, as in the case of Vought, there is gross default in the recipient’s commitments to the State of Texas.
As you are aware, the Texas Enterprise Fund was established by the 78th Legislature to recruit new business for Texas and to promote the creation of new job opportunities. In House Bill 1938, the 79th Legislature amended the Texas Enterprise Fund provisions to require written agreements between your office and the recipients, annual progress reports by the recipient, and a report from you to the Legislature concerning the status of grants before each regular session.
While the Legislature should be applauded for recognizing the total absence of accountability before H.B. 1938 was enacted, its provisions provide no comfort where, as here, the recipient is in such financial straits that it faces job eliminations to survive. And, if there are accountability measures you have adopted internally, they obviously are not working.
I strongly urge you to immediately institute tighter controls on taxpayer dollars awarded from the Texas Enterprise Fund. I call on you to require the State Auditor’s Office to audit all contracts with grant recipients; to instruct the Texas Workforce Commission to verify all job and payroll information previously provided to you by any and all grant recipients and all grant recipients going forward; and to require quarterly performance reports by grant recipients in addition to the annual progress reports required under HB 1938. If any of these measures require legislative action, they should be added to the call of the upcoming special session.
Tighter controls are a must in order to provide the accountability that the people of Texas deserve.
Carole Keeton Strayhorn