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Three companies scouting city as Council considers new rules for incentives

Thursday, October 1, 2009 by Austin Monitor

Three companies involved in the manufacturing of solar panels are interested in moving their operations to Austin, according to Mayor Lee Leffingwell. Though nothing has been put in writing, Leffingwell has met with representatives from those companies, and, he said Wednesday, “all three are very seriously considering Austin.”

 

According to the mayor, one of the companies would like to be operational by next summer, though the process would involve several months of lead time even after an agreement with the city was reached. That company, Leffingwell said, is interested in moving into a shell rather than erecting a building from the ground up.

 

The mayor said he is encouraged by the news: “I have said, ever since 2005, that targeted industries, like those in the renewable energy business, would be specifically the ones we would want to talk to about coming to Austin.” 

 

So, any changes to the city’s economic incentives policy—such as those being considered at today’s City Council meeting—are not just an academic exercise.

 

The Council is expected to approve an ordinance establishing an enhanced economic incentive proposal review process. That would require a formal cost-benefit analysis as part of the city’s evaluation process for economic incentive agreements including “direct and indirect costs of such proposals.” It would also implement a timeline of 13 days to allow citizens to review and comment on any economic-incentive proposals before the Council could take action on them.

 

The ordinance is the result of a February Council resolution directing the city manager to convene a stakeholders group – made up of members of the Austin Chamber of Commerce, Greater Austin Hispanic Chamber of Commerce, the Capital City African-American Chamber of Commerce, Liveable City, and Austin Interfaith – to consider elements of city policy concerning economic incentives. The group met on three occasions in March, April, and July to discuss the implementation of the cost-benefit analysis as well as a timeline for the city’s review process.

 

One issue the stakeholders group did not make a determination on concerns wages and benefits for workers employed by companies that receive tax incentives from the city. This is a concern for Austin Interfaith and other citizens’ organizations, which see the issue as vital to the economic and social future of the city. These groups want the Council to ensure that any companies receiving incentives from the city provide their employees with a living wage (no less than $18 an hour), health benefits, and clear paths to advancement within the company, and that those companies have a strategy to hire local workers.

 

According to Austin Interfaith Strategy Team member Minerva Camarena Skeith, these groups are concerned that economic incentives without built-in safeguards for local workers might cripple the economy. “We want to make sure,” she said, “that our tax dollars are being spent on bringing high-quality jobs to Texas, not just providing breaks for corporations. If companies are going to be profiting off our incentives, they should have to provide for the city and its citizens.”

 

“We have to ask ourselves: Is Austin is going to be a city of low-wage workers, or are we going to set a higher standard?”

 

According to Skeith, at accountability sessions Interfaith Austin held during this year’s elections, all current members of the City Council, including Leffingwell, made commitments to support worker protections in any economic-incentive legislation. “We’re confident,” says Skeith, “that the council members will honor their commitments.”

 

But one council member, Sheryl Cole, says she is concerned that such a proposal could have unintended consequences for the city. “I simply do not want us, in the interest of helping our work force earn more and receive more benefits,” Cole said, “to operate under a faulty premise and keep economic opportunities out of Austin for the most vulnerable members of our society.

 

“I certainly support living wages and health benefits. I am, however, concerned that we do not take any actions that have a negative impact on our unemployed and underemployed, such that we are not granting incentives to help those most in need of social-service assistance. I do, however, think that the ordinance can be drafted in such a way that we do not exclude any companies that have jobs that would be available to the most vulnerable members of our society but … that cannot pay the living wage or health benefits,”

 

Leffingwell, for his part, believes health benefits should be a necessary component of the city’s economic incentive agreements. “I don’t see how the city could enter into an agreement with any company,” he said, “that did not provide the opportunity to have basic health insurance for its employees.”

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