hen the Texas legislature next convenes in January 2009, Gov. Rick Perry will know exactly how to focus his economic development strategy to make his state more competitive and business friendly for the long term. The Governor's Competitiveness Council, which Perry formed in December 2007, delivered its Report to the Governor on August 6th. It contains recommendations in five categories that will likely shape support, or non-support, of economic development-related bills that come before him in the next lawmaking session. The Council also put forth a set of recommendations pertaining to the energy demands of Texas consumers.
      The categories and thrusts of the competitiveness recommendations are:
      Talent development: To equip state education and work force resources to ensure Texans are adequately prepared for jobs in the global economy;
      Innovation: To support innovation and entrepreneurial activities and boost the rate of commercialization to attract foreign investment, increase productivity and generate economic growth;
      Infrastructure: To build and maintain reliable energy and transportation infrastructures that allow efficient response to market demand, product delivery, cost minimization and operation efficiency;
      Resources: To develop energy diversification in order to reduce dependence on foreign energy sources; and
      Governance: To ensure that laws are fair, predictable and minimal and to require state agencies to act quickly and fairly and to spend tax dollars efficiently.
      Several of the Council's recommendations pertain to technology-based economic development, which is key to continuing to attract high-tech projects to Texas. These include:
      • Expand the Texas Science, Technology, Engineering & Math (T-STEM) Initiative, which supports and accredits K-12 STEM academies;
      • Include economic development metrics in funding formulas for state universities and community colleges;
      • Incorporate private investment into the state's Emerging Technology Fund and align the fund with the Texas Clusters Initiative;
      • Create innovation prizes in energy storage and clean coal;
      • Re-institute R&D tax credits;
      • Create a statewide angel network;
      • Establish a statewide commercialization foundation as a one-stop shop for university technologies; and
      • Stimulate the creation of incubators in the state.

      The Texas 2008 State Energy Plan focuses on five areas essential to meeting the energy demands of Texas consumers:
      Generation: Allow the competitive market to incent deployment of generation resources, focusing efforts on removing existing barriers to market entry.
      Transmission and distribution: Build and improve the infrastructure necessary to deliver power.
      Energy efficiency and demand response: Provide Texans with the tools they need to manage their energy use.
      Retail electric market: Resist the urge to re-regulate, but revisit certification standards for retail providers.
      Governance: Coordinate energy functions.
      Recommendation specifics can be found at www.governor.state.tx.us/gcc.
      "Since last year, the Competitiveness Council has been studying innovative ways to enhance Texas' competitive position in a global marketplace, including better aligning our state's education curricula and workplace demands," says Gov. Perry. "This shift will not only benefit our students as they prepare for the next steps in their lives, but also Texas industries which are always in search of a skilled and qualified work force."
      The Competitiveness Council is composed of 29 members, representing key industry sectors, ex-officio elected officials, higher education and work-force agencies. Their work builds on legislation the governor signed in 2003 that called for the development of strategies to strengthen the competitiveness of several key industry clusters, namely energy, petrochemicals, aerospace and defense, advanced technologies and manufacturing, biotech and life sciences and computer and information technology.
      "If we can make our state more competitive, run it more sensibly, and put our resources where they'll make the most difference, we will continue to draw investment and gain more solid footing in the global marketplace," Perry asserts. "Companies are drawn to Texas by business opportunities and a favorable tax structure, which in turn creates more jobs and opportunities for Texans."
      The business tax structure did, in fact, turn more favorable in March, when the unemployment insurance (UI) replenishment tax was suspended for a year. About 370,000 Texas businesses were to benefit from the tax break, saving those employers $90 million.
      "Thanks to our healthy economy and low unemployment rate last year, the state collected more money for the unemployment trust fund than we need," said Gov. Perry, "which is why I am directing the state to bring that tax to a screeching halt for this year."
      According to the governor's office, the 2008 UI tax rates also reflect the elimination of the obligation assessment, which was previously a component of the UI tax.
      The 80th Texas Legislature passed a measure allowing the Texas Workforce Commission to pay off bonds issued in 2003 to bolster the trust fund. By paying off the bonds early, Texas employers will save an additional estimated $270 million in taxes in 2008.