Texas Association of Manufacturers Joins Statewide Initiative to Advance Dedicated Water Funding for Texas

December 24, 2024

AUSTIN – The Texas Association of Manufacturers (TAM) has joined a new statewide coalition of business leaders and organizations urging the Texas Legislature to establish a dedicated revenue source to fund future water projects — an essential investment in the state’s long-term resilience and economic future. Water funding is a top priority for the Association for the 89^th Legislature. See the complete TAM Top 10 here.

“Manufacturers recognize that water is essential for job creation and economic growth. This need is even more pronounced today considering the challenges to our nation’s supply chain security and the need to attract advanced technologies and critical manufacturing back to Texas and the United States,” said Tony Bennett, president and CEO of the Texas Association of Manufacturers. “Texas policymakers have been forward-thinking in supporting innovative approaches to water infrastructure funding. To build on these successes, Texas must establish a dedicated funding stream for the Texas Water Fund. The consequences of not doing so could be dire and even endanger Texas’ economic miracle.”

The water coalition’s efforts center on two goals: developing a resilient, diversified water supply to meet increasing demand and upgrading aging drinking water and wastewater systems across Texas. Just as a dependable energy grid and skilled workforce are pillars of Texas’ success, reliable water infrastructure is foundational to sustaining long-term growth and prosperity.

For more information about the water coalition, visit www.texas2036.org/txwater-funding.

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Media Contact: Gretchen Fox, 512-694-4326

Career and Workforce Readiness

TAM supports flexible yet rigorous pathways in K-12 public schools and higher education, recognizing there are many pathways to career success. Texas’ education system must be aligned to prepare students to meet the diverse and evolving needs of employers. TAM supports strong career and technical education (CTE) in all Texas school districts, not only because CTE students graduate high school at higher rates, but because these programs play an integral role in introducing both careers and industries, along with early exposure to higher education courses, to students who might not be exposed to them otherwise. TAM supports a strong system of career, college, and military advising beginning in middle school, with a particular emphasis on “return on investment” and a recognition that many careers do not require a 4-year degree, which often is accompanied by crippling student loan debt. Students should receive college credit whenever possible for workforce education classes, including most industry-based certification programs.

TAM supports a strong accountability system for both public schools and institutions of higher education, with outcomes being paramount. TAM supports the “returned value funding formula” adopted by Texas State Technical College (TSTC), which pays the institution based on their graduates’ incomes, not contact hours in the classroom. That funding system rewards quality technical training, employability, and placement in a job, which is mutually beneficial to students, employers, and the state’s economy. TAM also supports the community college finance overhaul to reward our community/junior colleges and credentials of value. In addition, TAM will continue to advocate that a job placement metric is just as important as students earning a credential.

TAM supports high-quality workforce training programs and funding that provide exceptional rate of return for the Texas economy — programs administered by the Texas Workforce Commission and local workforce boards including: the Skills Development Fund (SDF), Jobs and Education for Texans (JET) Program, and learn-while-you-earn apprenticeships TAM strongly supported the effort to finally fund the Texas Industry Recognized Apprenticeship (TIRA) grant program with $10 million. Finally, TAM supports an education and workforce training system that encourages and enables local and regional employer engagement at every level of the pipeline — from middle school through college.

Tax Structures that Promote Economic Growth

TAM supports a competitive tax climate that will incentivize investment by new and existing businesses. Sometimes, the State of Texas must adjust how taxes are applied in order get the attention of capital-intensive projects. Simply said, strategically and temporarily limiting tax liability on certain investments can generate a net gain in local and state revenue. Encouraging growth of an industry by making the tax structure more competitive vis-a-vis neighboring states and countries can produce a net win for Texas governments and industries. Manufacturing projects act as magnets to attract additional vendors and suppliers, service companies, and other businesses that follow the host project. This “ripple” or “multiplier” effect creates still more quality jobs and property tax wealth for many Texas communities. In fact, every direct manufacturing job Texas creates provides an average of five jobs in other industries (Source: National Association of Manufacturers/IMPLAN).

TAM will continue to support the new Jobs, Energy, Technology and Innovation (JETI) Act. In 2023, the Texas Legislature worked to create a program that allows school districts to offer limited, temporary property tax discounts for purposes of economic development – the JETI Act. As the Legislature recognized that changes in the global supply chain gave Texas communities a chance to bid for new capital-intensive industrial projects that could bolster national and economic security, supply chain stability, and energy independence, they created this program, which will be a boon for the growing Texas economy. Yet, competition for these capital-intensive projects is fierce: nearly all other states and countries offer similar economic development incentives. TAM must work with the legislature to ensure that any changes or modifications to the JETI Act serve the purpose of enhancing Texas’ competitiveness over neighboring states and rival countries.
TAM supports a competitive Research & Development (R&D) Tax Exemption as it was originally designed by the Legislature. After decades of effort, the 2013 Texas Legislature passed a long-sought R&D incentive, which allows businesses to choose either a sales tax exemption or a franchise tax credit. This allows Texas to stay at the forefront of advanced manufacturing innovation – and attract this key element of business development to the State. Legislators must make this beneficial tax structure available to Texas manufacturers and ensure that it provides long-term stability in R&D growth planning for this critical sector of the Texas economy.

TAM supports an update to our tax laws regarding the sales and use tax for general aviation aircraft. Texas must align its aircraft sales tax exemption for maintenance, repair, and overhaul (MRO) of general aviation aircraft to be competitive with neighboring states. Texas MRO operators estimate revenue losses three to five times what they remit in sales taxes due to a lack of parity with exempted states. Additionally, Texas is losing economic activity on related aviation tech jobs, fuel, hospitality, manufacturing investment, and maintenance. Making Texas competitive with neighboring states will help Texas’ significant general aviation industry continue to flourish.