Monday, December 3, 2012

Business Love In The Time Of Drought

Vote could mean jobs

By Mikaela Rodriguez
Laredo Morning Times
Published: Monday, December 3, 2012 1:51 AM CST

Laredoans could see the creation of 105-plus jobs if City Council votes today to approve an agreement with Select Energy Services, a Houston-based oilfield service company.

City officials have entertained discussions for the company’s expansion in Laredo for about a year, courting the company with the promise of tax abatements and incentives.

Select would receive $95,000 toward property taxes for five years and a waiver of building permit fees, totaling $100,000 in savings.

Monica Tomutsa, administrative assistant, said city officials were most interested in job creation and the type of salaries a company wishing to expand locally could offer.

New positions with Select average $40,000 a year with benefits.
Select Energy Services will provide water management services for the drilling industry in the Eagle Ford Shale.  This bodes well for local government officials because they can show to the public that they are working to bring in good-paying jobs to the community.  But I can almost predict that nobody on council will bring up the issue of drought conditions in our area, or the demand that the drilling activity is having on our water reserves and on our city, not to mention the pittance that companies have to pay to procure large amounts of water for the drilling itself.
Of note also is that the NY Times questions what tax abatements really mean for municipalities.
The free flow of tax breaks and subsidies in Texas makes it particularly fertile ground to examine these economic development deals and the fundamental trade-off behind them: the more states give to businesses, the less they have available in the short term to spend on basic services, a calculation made more stark by the recession.
I understand that this is how business is done, especially in Texas, but it's not clear if Raul Salinas, Carlos Villarreal, and city council think this out in the long term.  They give tax breaks to companies, and then they raise our rates on trash pickup, and park use to make ends meet.  It's weird how that works.

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