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s if to underscore its claim to the 2004 Governor's Cup, Texas ended the calendar year with a December new-jobs announcement that dwarfs the number of jobs associated with any of the more than 660 qualifying projects that won the state the award. Countrywide Financial will add 7,500 employees to its payroll in the state, mostly at its operation in Richardson, which as part of the Dallas-Ft. Worth metro area enjoys top billing as a 2004 Top Metro (see page 154). And January 2005 saw a 1,600-job, US$100-million investment from Tyson Foods for a meat-packing plant in Sherman.
     Site Selection publisher Conway Data, Inc., has been tracking business expansion activity for more than 40 years. The Governor's Cup and other awards bestowed by the magazine are determined by the number of qualified projects logged into Conway Data's New Plant database. Qualifying projects involve a capital investment of at least $1 million, create 50 or more jobs or involve new floor space of at least 20,000 square feet (1,860 sq. m.).
     Texas lured enough such projects, large and small, in 2004 to bring the Governor's Cup back to the South after several years of

Lone Star Dynasty Over 27 years, Texas proves its dominance in Site Selection Governor’s Cup Texas is known for producing dynasties — the Dallas Cowboys of the 1990s, presidents and governors named Bush, the Hunt family, and the Ewings of TV fame, just to name a few.      But the biggest dynasty of all may be the Lone Star State itself. By claiming the Site Selection Governor’s Cup for 2004, Texas became the all-time leader in Cup titles in the 27-year history of the corporate project competition. Since 1978, Texas has claimed the Cup a record six times — in 1978, 1980, 1981, 1982, 1992 and 2004 — beating out five-time winners Michigan and Florida. Adding to its dominance is the fact that Texas placed second on five occasions, third six times, and fourth one time.      Since 1978, Texas has finished in the Top Ten Governor’s Cup ranking more than any other state — a record 26 times.      But Texas isn’t the only state with an impressive track record of corporate facility performance. Florida and Michigan took turns flexing their muscle in the 1980s and 1990s. Florida won its five titles from 1986 to 1991. Michigan claimed its five No. 1 new plant rankings from 1997 to 2001.      Other dynasties of the past 27 years include Ohio, with four titles between 1993 and 2003, and California, with three titles between 1984 and 1987. The other multiple winner is North Carolina, which shared the No. 1 ranking with Texas in 1992 and won a title outright in 1996.      A check of the Site Selection archives shows that Texas has a history of securing large projects. In 1992, the Lone Star State landed Koch Industries’ $600-million expansion of its Corpus Christi refinery and Temple-Inland Forest Products’ $500-million expansion of its Evadale paperboard mill.      Shervin Freed, then a vice president with consulting firm A.T. Kearney in Chicago, was quoted in the February 1993 issue of Site Selectionas saying, "Texas’ proximity to growing Southwest markets, and especially to California, is a real plus. Of course, Texas is in an excellent position to take advantage of NAFTA (the North American Free Trade Agreement) in the future."       Judging from Texas’ run of success in corporate project activity, Freed turned out to be a prophet. — Ron Starner

Midwestern winners. Texas last won in 1992, when it shared the prize with North Carolina, but the Lone Star State is no stranger to back-to-back individual wins with a three-peat occurring in 1980, '81 and '82 (see the historical chart oat right). At the rate Texas is racking up new facilities lately, and with a business climate ranked first in the U.S. by this publication (see the November 2004 cover story), it could happen again.

     Central to Texas' ability to lure projects is the $295-million Texas Enterprise Fund (TEF) authorized by the legislature in 2003 to help seal deals that might have gone elsewhere. More than $200 million of the fund has been spent so far, resulting in more than 22,000 new jobs at Texas Instruments, Countrywide Financial and numerous other projects, including the new Tyson Foods plant.
     "The clincher on that project was the Enterprise Fund," says Gov. Rick Perry. "We had some stiff competition from Durant, Oklahoma, just across the border. We enjoy beating Oklahoma from time to time — we're having a hard time doing that on the football field, so we'll have to do it on the economic development front."
     The governor has asked the current legislature to raise the TEF allocation to $300 million to give him the tools needed to deliver job growth. But there are other arrows in his quiver, and the legislature itself deserves some credit, says the governor. "The legislature demonstrated disciplined fiscal responsibility in dealing with the 2003 budget, where we faced a $10-billion budget deficit. Rather than take the easy way out by raising taxes and telling people it was too big a deficit to deal with solely by reducing spending, we didn't do that. I share that fiscal restraint with the lieutenant governor, David Dewhurst, and the Speaker, Tom Craddick, and with their leadership. It was a team effort of people who are committed fiscal conservatives. Texas is a textbook example of growing your way to prosperity," he notes. "You do not tax your way to prosperity."
     A focus on education yields a skilled work force, and despite the budget deficit, the legislature allocated over $1 billion in new funding to public schools, notes the governor. "That, coupled with the restraint on spending, sent a real message to the business community that not only do we get it from the standpoint of tax policy, but we also get it by continuing to support a skilled work force in the state."
     Texas' regulatory climate is fair and balanced, he adds, pointing to passage in 2003 of a tort reform bill. "That bill is now perceived to be a national model for other states," says Gov. Perry. "The message to the business community is that you can come to the state, risk your capital and know that you will not be sued frivolously. It's powerful legislation," he adds. "The Wall Street Journal called it '10-Gallon Tort Reform.' As the president goes forward with national tort reform, we wish him every bit as much good luck and godspeed as what we've had in Texas with it."

     Still, the role of the Enterprise Fund cannot be overstated. "The legislature's committing $295 million to that fund was a short-term difficult decision to make because of the economic situation we were in," says Perry. "But long term, it was very visionary relative to the job creation climate in Texas. No other state in the nation has had the type of turnaround economically that Texas has had." Indeed, the state comptroller announced recently that the state had $6.4 billion more to spend than what could be spent in the last budget cycle, which should help give the Enterprise Fund a new lease on life.
     But the governor has another ace up his sleeve. He is seeking from the legislature an additional $300 million for the creation of the Texas Emerging Technology Fund (TETF). Half the funding would be dedicated to creating "regional centers of innovation and commercialization" to be developed jointly by institutions of higher education and the private sector. Two such centers already exist — Sematech in Austin and the Center for Advanced Diagnostic Imaging in Houston.
     One quarter of TETF, or $75 million, would be used to match research grants awarded by federal or private sponsors. The funds will help in-state researchers compete for out-of-state dollars, because sponsors will know that their investment will have double the impact. The remaining $75 million will be used to attract renowned out-of-state research teams to Texas universities.
     "My vision here is to create a way that in four or five years you have enough [commercialization of] these technologies to create enough wealth to perpetuate the fund," says Gov. Perry. "The return on investment can be tremendous with some of these concepts."