Austin College’s annual public administration symposium last week, explored questions about the Texas economy, and "the benefits and drawbacks of a low-tax, light-regulation political economy." Panelists were asked to respond to a recent book celebrating the economy of Texas, and compose an answer to the title of the symposium, "Texas got it right?"

Austin College’s annual public administration symposium last week, explored questions about the Texas economy, and "the benefits and drawbacks of a low-tax, light-regulation political economy." Panelists were asked to respond to a recent book celebrating the economy of Texas, and compose an answer to the title of the symposium, "Texas got it right?"


Many Texoma leaders, from elected officials to entrepreneurs, turned out to hear responses from four panelists and one keynote speaker representing a variety of perspectives on the symposium’s prompt. Although all except one of the speakers is a graduate of AC, there was a wide range of opinions and occupations between the leaders.


The keynote speaker of the event was Texas Economic Development Council CEO Carlton Schwab. Schwab said, from an economic development perspective, Texas did "get it right," but with some qualifications. Schwab mentioned that some of Texas’ property tax policies and the complicated nature of the state’s "margin tax" on corporate profits are two things that sometimes drive businesses away from Texas.


Schwab also said that even though Texas has a strong economy and infrastructure, there are many challenges facing the state in upcoming years related to health care, water and public education. Schwab said the question the state faces is whether the benefits of a business-friendly economy and reputation "are enough to offset the real issues in front of us, and does the legislature have the will to address those issues? Only time will tell."


Bill Warren, a CEO of a digital media company and another alumnus, brought a different perspective to the discussion. Warren first established his credentials as a born-and-raised Texan and asked the audience to do the same, with a show of hands. "Did we really get it right economically, or did we just get lucky?" Warren said. "I’m going to take the contrarian view that we actually just got lucky. Geology. If it (wasn’t) for oil and dinosaurs, Texas isn’t as good as it is. Without the oil, our policies and economic policies in Texas wouldn’t be what they are. Oil drove our policies in the state of Texas, I’m sure of it."


Warren described how he and his father invested in oil fields in Midland and said, as a Republican, he saw that oil companies like his influenced the rise of the Grand Old Party in the state. "In my opinion, oil and the entrepreneurs really changed this state quite a bit. We, oil companies, changed the geopolitical map in Texas. That didn’t happen until 1970. … The oil and gas industry has done more for jobs, more for the market, than anything else in this state."


Stuart Greenfield, a professor of economics at Austin Community College, suggested otherwise: "In 2012, there were 335,000 jobs created. Of those, 22,100 were oil and gas combined with their services. It’s only 7 percent, but it did generate a large volume of economic activity. The Eagleford Shale generated $61 billion, which is about four percent of the state’s economy. That’s a significant chunk of money. Barnett (Shale) is just coming online."


Greenfield also highlighted the jobs and economic activity surrounding health care as one of the driving forces of the state’s economy. Greenfield’s presentation in response to the prompt of the symposium highlighted the shifting demographics in Texas and suggested that the state may face unexpected consequences of the increase in migration and the Hispanic population.


"If you look at the population under the age of 18, there is actually a decline in the number of Anglos in the state," Greenfield said. "What does that mean? Well if you look at how half the state’s population grows in just the largest counties. Many of the counties west of Forth Worth are actually experiencing a decline in population.


"So with the rise of Hispanic youth, our public education system is going to dramatically change. I would hope that most of our leaders and elected officials recognize that. The thing that is of concern to me is, if Texas wants to continue on this path, … what’s going to be required is providing education services to this group."


Other speakers on the symposium’s panel weighed the environmental and infrastructural impacts of Texas’ economic policies. The college welcomed two alumni, attorneys who work for organizations lobbying Congress. Although both successful lawyers and Kangaroos waxed poetic about old professors and campus memories, the career paths of the two men have found them advocating opposing perspectives on economic development.


Adam Haynes, a class of 1988 double major in economics and political science, is now a partner in a public affairs firm that lobbies on behalf of the oil and gas industry and trade associations. Haynes was joined in discussion by Anthony Swift, a class of 2003 biology and political science double major.


Swift is an attorney for the Natural Resources Defense Council, an environmental advocacy group that also lobbies and raises awareness of environmental and regulatory concerns.


"Let me tell you how Texas got it right," Haynes said. "I recently have started my own firm, (representing) oil companies and I primarily represent other independent producers, the men and women who go out and punch holes in the ground; find oil and natural gas; and bring that oil and natural gas to the surface; prepare it for market; then turn it over to refiners. When you use that segment of the business, Texas is absolutely getting it right for that."


Haynes said that the regulatory environment in Texas was adequate to keep environmental concerns at bay, and he argued that the amount of fines issued by regulators in a given time period is not necessarily a relevant measure of how effectively they are regulating.


Haynes said that Texas is not necessarily as business-friendly as was often asserted during the symposium: "Texas is blessed by geography and geology, but when it comes to tax policy for oil and gas producers, while we are competitive, (other states) offer better incentives and lower tax rates for oil and gas producers than does Texas."


Swift gave an opposing perspective, comparing the current oil and natural gas economy in the state to the economic boom in wheat products in the 1920s, before the Dust Bowl.


"You wouldn’t want to invest in the long term in the Texas panhandle in the ’20s," Swift said, "and I think that when it comes to Texas’ general energy policy, it may find itself in a similar situation where, in the short term, there’s an maximization of economic prosperity, but it’s at the sacrifice of the long-term, and there’s a highly risky leveraging act that is going on."


Swift said that the regulatory environment in Texas and the United States in general doesn’t do enough to prevent environmental disasters like gas releases and oil spills, which can be costly and complicated to clean up.


Swift used as an example the tar sands pipeline that ruptured in 2010, operated by Canadian company Enbridge. The pipeline system also traverses part of Texas as it carries the petroleum product to the refineries along the Gulf Coast. The pipeline ruptured in 2010, spilling at least 1 million gallons of tar sands oil, according to the Environmental Protection Agency.


Swift said that spill "cost over a billion dollars. The national pipeline regulator only fined Enbridge $3.7 million. These sorts of fines do not push industry to act at the standard that the public usually would want them to. … Texas is creating a regulatory system that may be incentivizing business today, but it will be at the detriment of business tomorrow."


"I don’t know if Texas got it right," said Danielle Hendricks, an Austin College senior from Texas. "I see so many problems and I feel like maybe only a fourth of them are being addressed, but then it’s also so hard to get funding. It’s a matter of whether environmentalists will stand up and say we have to do something about this, or government, or the oil industry. When you only think about things economically, it drives you to do things cheaper, but we really need our water clean."


Matthew Goldstein, a senior from California, said, "When you compare Texas’ process with other regulatory processes, it certainly seems like less paperwork. To me that probably is a factor."