< Previous46 T E X A S E C O N O MI C DE V E L O P M E N T G U I DETexas as home for its new Army Futures Command. And more relocation announcements are yet to come. How were you able to improve student achievement in the state’s K-12 schools? What are your plans moving forward for continued school reform?GOV. ABBOTT: Students learning in our classrooms today are more than the future workforce of Texas. They are also the future job creators of America. It’s amazing to realize that Texas public schools educate more than 5.3 million students in pre-kindergarten through 12th grade — that’s more than 1 in 10 of all public school students in the United States. The gains we make here matter not only for our children’s future, but also for the nation’s. That’s why I want our schools to be the best in America. And that’s why we are focused on ensuring that every student is reading at grade level by the time they finish the third grade. That every child, regardless of their zip code, receives a quality education. And that every student graduates with more than just a diploma. They will graduate with the tools they need to excel in college, a career or the military.To do that, I am committed to increasing the state’s share of education funding, prioritizing spending in the classroom, and increasing teacher pay and providing incentives to ensure the most effective teachers are in the schools and classrooms where they are needed most. Businesses grow where the workforce is ready, and leaders in manufacturing, technology, life sciences, financial services and other industries are growing in the Lone Star State, adding one million new jobs over the last four years. That incredible growth is because of our greatest natural resource — a job-ready workforce of 14 million strong, with one of the youngest median ages in the nation. Much of that high-performing employee base is drawn from Texas’ top-ranked public and private universities — leaders in business, biotech, engineering, and more. I’m proud that with the state’s continuing investments in advancing higher education, the number of Tier One research universities in Texas has doubled. And now through the Governor’s University Research Initiative, Texas is welcoming even more transformative and internationally recognized researchers, Nobel Laureates and National Academy members who will serve as catalysts for further economic development, bringing discoveries from the research lab to the marketplace in partnership with the private sector. Texas also invests in innovative workforce training programs, including the Skills Development Fund, Texas’ premier job-training program providing local customized training opportunities for Texas businesses.You mentioned “skyrocketing property taxes” as a problem in Texas. What is your plan for combatting this?GOV. ABBOTT: Today, the Lone Star State leads the nation in everything from “I proposed a plan to limit the ability of taxing authorities to raise property taxes on homeowners and businesses.” – Gov. Greg Abbott48 T E X A S E C O N O MI C DE V E L O P M E N T G U I DEjob creation and economic growth to oil production and technology exports. Unfortunately, Texas is also among the national leaders in a less desirable category — property taxes. That is why I proposed a plan to limit the ability of taxing authorities to raise property taxes on homeowners and businesses. My plan puts more power in the hands of local citizens, where it belongs. Texas law already requires rollback elections when taxing authorities exceed their rollback rate. What I propose is lowering the rate that would trigger an election — giving taxpayers a greater say when it comes to their property taxes.This limit on property tax increases would encourage cities and counties to be more efficient with tax dollars and to prioritize needs like public safety. But since we are asking cities and counties to be more efficient with tax dollars, then the state must also play its part. That is why I am calling for a law that prohibits the state from imposing new unfunded mandates on cities and counties. We will curb the growth of property taxes while also adding more funding for our schools — to keep Texas the best state for business.How are you growing Trade between Texas and other countries?GOV. ABBOTT: Texas leads the nation in exports, now for the 17th year in a row. We lead in tech exports for the sixth year in a row. And we lead in jobs created by foreign and domestic investments. By air, land, sea or rail, the path to prosperity for more businesses begins in Texas.Texas serves as the gateway to global trade for the entire nation with our unique and strategic geographic position — centrally located in the United States, with close access to Mexico, our No. 1 trade partner, and with trade links to Canada, and direct shipping routes to Europe and beyond. Each of the state’s 29 ports of entry, whether accessible via air, land, or sea, supports domestic and international economic activity across multiple industries. The Port of Laredo is the No. 1 inland port along the Photo: Getty Imagesentire U.S.–Mexico border. Along the 367 miles of Texas coastline are 11 deep-draft commercial ports and six shallow-draft ports, with Port Houston ranking No. 1 in the U.S. for foreign waterborne tonnage. And Texas’ ports are connected by the Gulf Intracoastal Waterway, an integral component of the state’s vast petrochemical and manufacturing supply chains. Texas also has 32 Foreign Trade Zones, allowing goods to be exported from the zone free of duty and excise tax. Along with more miles of public roadways, state highways, and freight railways than any state, Texas is also home to more airports as well as two major international airlines headquartered in Dallas-Fort Worth with a third operating a major hub in Houston. This past year, we completed a nine-day business development mission in India, my fourth international business development trip since taking office. The visit included a number of meetings with business leaders, industry executives, and some of the highest officials of the Indian government, including Prime Minister Narendra Modi, to help promote greater economic and trade relationships between India and Texas.During the trip, JSW Steel announced their intention During Gov. Abbott’s first term in office, Texas cut taxes by nearly $4 billion. Source: Texas Governor’s Officeto invest $500 million into expanding their steel manufacturing in Baytown, and Wipro Limited announced their new Texas Technology Center that will bring more jobs and investment to Plano. Notably, we also saw the first export of liquefied natural gas shipped internationally from Corpus Christi in December 2018. And my office is participating in an energy trade mission to Israel in September 2019.How has the brand identity of Texas changed during your tenure in office?GOV. ABBOTT: It’s gotten bigger. Success attracts success. As a result, Texas continues to lead the nation in new corporate facility projects and expansions. And there’s room to grow even more.Why should any business executive seeking an expansion location in North America consider Texas?GOV. ABBOTT: Texas offers unmatched advantages for business success — access to talent, markets and cost efficiencies — and the freedom to grow. That’s why new business formation in Texas is at a five-year high, with startups growing alongside the world’s biggest brands, the headquarters of nearly 50 Fortune 500 companies, hundreds of publicly traded firms, and more than 2.6 million small businesses. That’s why Texas is the top exporting state, the top tech-exporting state, and the top state for domestic and foreign direct investments. And that’s why, with an annual gross state product of $1.7 trillion, Texas is the 10th-largest economy when compared to the nations of the world. I think one successful Texas entrepreneur perhaps puts it best: “If you like big ideas … build your business in Texas.”What are the biggest long-range goals that you have left to fulfill in your administration?GOV. ABBOTT: Every day, we are called upon by the people of this great state to dare greatly, to address the challenges Texans cannot solve themselves, and to make Texas even freer, stronger, safer and smarter.Texas was built on bold ideas. It was built by the men and women who came before us, who worked together to make Texas the most exceptional state in the nation. It is our charge now to chart a course that will make Texas even better — not just for the next four years, but for the next 40 years. We have an opportunity to turn bold ideas into reality as we focus on further elevating education, expanding economic opportunity, ensuring public safety, and building an even stronger, brighter future for all Texans.All of this we can do. All of this we must do. Because we live in the greatest state in America and we have an obligation to make it even better. And when we do that, we will keep Texas the best state for business and the greatest state in America. hen Texas claimed the prestigious Governor’s Cup award from Site Selection magazine for a record seventh year in a row in March, no one was happier than Bryan Daniel.As executive director for economic development for the Office of Gov. Greg Abbott, Daniel presides over a team of state personnel whose primary mission is to grow the Texas economy.For the past seven years, no one in America has done a better job at growing jobs and industry than Texas, and the 2018 Governor’s Cup win is the latest evidence. Daniel recently took time out to discuss his state’s 2018 performance and what it plans to do for an encore.by RON STARNERW52 T E X A S E C O N O MI C DE V E L O P M E N T G U I DEB R Y A N D A N IE L IN T E R V IE WT E X A S E C O N O MI C DE V E L O P M E N T G U I DE 53What were the three biggest project wins in Texas of 2018?BRYAN DANIEL: Apple in December announced a billion-dollar project in Austin that will have 1,000 new jobs to start — the second largest investment in the state. Our ability to attract tech companies is unmatched. Second was a Baytown $500-million steel mill plant investment to update equipment and add 1,000 new jobs. And then in November, McKesson announced it was relocating its headquarters from San Francisco to the Las Colinas area of Irving. We are seeing similar projects around the state.What are the top three priorities of the Office of the Governor – Economic Development and Tourism in 2019?DANIEL: We will remain very focused on ensuring that our business climate and our workforce remain on par with what companies are looking for in the state. We are making sure that our structure is what companies need to compete. And we are continuing across the state to diversify individual communities’ economies. We are also looking for opportunities to grow in new areas. Tech companies are looking at Houston now, for example. And we continue to focus our attention on attracting corporate headquarters to Texas, while we also help rural communities see more job growth. Some announcements in 2018 point to this success. There is a lot of interest in the legislature as well on this.How does your organization’s performance in 2018 compare with prior years?DANIEL: In our internal metrics, those numbers were slightly up year over year. In the second quarter of 2018, we were the top state for GDP growth. For 2018, we were rated the Top State for Business by Chief Executive magazine and the Best State for Business by CNBC. What are the factors driving growth in the Texas economy right now?DANIEL: The underlying economy is built on financial services, energy and manufacturing, and they all remain very strong. West Texas energy production is high right now. Our financial underpinning is strong. We have seen a lot of growth in financial services the last five years. Workforce is the number one thing companies are looking for here. Texas workers are highly prepared and highly motivated. A lot of people are relocating to Texas because of the jobs we are creating. We are adding as many as a thousand new Texans a day — half by birth and half by moving here from other locations. Over 288,900 new jobs were created in the state last year. We are seeing a lot of upside in workforce and the diversification of our economy. That gives us an opportunity to do the things we are really good at.What is your message to CEOs in other states and countries when you meet with them?DANIEL: We spend a lot of time talking about the quality of life, our fair tax structure, and the fact that we have no personal income tax. I tell them that you can move your employees here and pay them the same salary and give them Texas is adding as many as a thousand new Texans a day – half by birth and half by moving to the state from other locations. Source: Texas Economic Development Corp.54 T E X A S E C O N O MI C DE V E L O P M E N T G U I DEan immediate pay raise because of the tax issue. Employers are concerned about the well-being of their workers. They find that our workforce is on par with the best. We have great schools and great opportunities. We have a large and innovative workforce. We are seeing companies move from elsewhere, and their employees do not hesitate to move here, including their top executives. We put them in touch with other CEOs who are already working here in Texas. They tell an even better story than I do. A lot of California companies have decided to seek greener pastures in Texas. Why?DANIEL: There are multiple reasons for that. I was in California just last week. It is very crowded there now. The tax and regulatory structure there, they say, is not conducive to their growth and success. When they come here, they see a very clear difference between where they are and where they could be. They see a workforce here that matches what they are looking for. They feel they can be in a place where they can experience future growth. They are selecting Texas out of every other place in the world. More U-Haul trucks end up in Texas than in any other state. Why?DANIEL: We are seeing companies come to Texas for multiple reasons. They want to be in a pro-business environment. People view the quality of life here as something they would like to be part of. People are electing to move to Texas with their companies. They go with the job because they want to live here. They have heard a lot of great things about Texas. People who have moved here from California say that their perception of Texas has changed since they came here. People who are using U-Haul trucks are moving themselves, so they are making a very personal decision.What has been the most impactful policy change, for economic development in Texas, over the past 5 years?DANIEL: Governor Abbott focused on ensuring that Texas has regulations that allow businesses to succeed. He is ensuring that our tax climate is fair for all involved. In 2015, we cut our gross margin tax by 25 percent and increased infrastructure spending by $4 billion a year without raising taxes. Many people are looking to make homes for their “In 2015, we cut our gross margin tax by 25% and increased infrastructure spending by $4 billion a year without raising taxes.” – Bryan Daniel, Executive Director for Economic Development, Office of Gov. Greg AbbottNext >