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State EDC head lauds Type A set-up

October 24, 2012

Carlton Schwab, president and chief executive officer of the Texas Economic Development Council, addresses the audience during a town hall meeting at the Hall Center for the Arts Tuesday. (HERALD photo/Steve Reagan)

If Big Spring wants to remain a player in the economic development arena, it needs to keep its Economic Development Corp. under the current Type A set-up.

That was the message delivered by Carlton Schwab, president and chief executive officer of the Texas Economic Development Council, during a town hall meeting Tuesday evening at the Hall Center for the Arts.

Big Spring voters will decide Nov. 6 whether to keep the the local EDC under Type A guidelines – in which sales tax money is used strictly for economic development purposes – or to change the corporation to a Type B entity, which would allow expenditures to be used for community improvement projects.

And Schwab, an unabashed and unashamed Type A advocate, said the community would be best served by leaving the EDC mandate unchanged.

“I can't tell you how lucky we are to have the economic development tools we have here in Texas,” he said. “The EDC sales tax is the most important difference-maker in the history of economic development in our state … It has put us in the game. There are a lot of communities that don't have the ability to compete for businesses and jobs that you do.”

In its 20-plus-year history, the local EDC is credited with creating hundreds of jobs and adding millions of dollars to the local economy, Schwab said.

“Big Spring's EDC is well-run and well-respected … for its programs and its efforts in economic development,” he said.

Since the EDC sales tax was enacted in 1989, more than 700 Texas communities have established economic development efforts. Since that time, Schwab conceded, many have reverted to Type B operations. With few exceptions, however, he said those communities which have switched their EDC mandates have seen economic development efforts suffer as a result.

The problem, he said, is that the pressure to finance all sorts of community development projects become too great to ignore, leaving little if any money for attracting or growing businesses.

“What would happen is that with a Type B corporation, the playing field would be broadened so much,” he said. “You're going to be inundated by funding requests. For example, the Little League is going to come in and say, 'We need some new lights on our fields,' or the local softball association is going to say, 'You know, we really need some new fields' and all the other non-profits around town are going to come in, as well.

“Now, do you in local government want to be put in the position to say 'yes' to the Little League and 'no' to the softball association and so on?” Schwab added. “There are cities in Texas that have successful economic development under Type B, but they're very rare.”

And with the Texas economy recovering, now is the perfect time for a Type A EDC, he noted.

“You've got a real opportunity here, and that's all the more reason to have a strong economic development in place to give emerging businesses a helping hand,” Schwab said. “The United States is the place to be, and Texas is the place to be in the United States … I can't help but be bullish on the future.”

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