Texas Comptroller Glenn Hegar toured the SpaceX rocket development plant in McGregor on Thursday and later touted Greater Waco as a hotbed of aerospace-related companies contributing to a statewide manufacturing base that eclipses the total economy of Portugal.
Hegar spoke to about 60 business and community leaders at the Greater Waco Chamber of Commerce headquarters, his third visit on a “Good for Texas Tour: Manufacturing Edition.” Topics ranged from Hurricane Harvey and school finance to the challenge of accommodating the 1,200 people who have moved to Texas daily “the past 15 to 20 years.”
“I focused on the aerospace industry here because it is such a significant part of the Waco economic picture,” Hegar said during an interview.
He mentioned SpaceX, which employs about 500 people, and the L3 Technologies plant at Texas State Technical College airport that modifies commercial and military aircraft and employs about 1,300 people, though it has experienced layoffs in recent years.
Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, said Greater Waco has become home to more than 40 aviation- and aerospace-related companies.
“The aerospace industry employs a highly educated and skilled workforce,” Hegar said during his presentation. “About 60 percent of its Texas employees have at least some college experience, compared to 47 percent of all employed Texans.
“The aerospace industry also creates jobs that pay well above the statewide average, with the average full-time worker earning more than $97,000 a year.”
Aerospace and other makers of transportation equipment contribute $9.8 billion to annual exports and create almost 177,000 direct and indirect Texas jobs, adding $12.9 billion to the state’s gross domestic product, according to a fact sheet Hegar distributed.
In all, Texas manufacturers accounted for more than 3 million direct and indirect jobs in 2016, and manufacturers exported $210 billion in goods and contributed $228 billion to the state’s GDP.
Texas has the 10th largest economy in the world, bigger than the U.S. neighbors of Mexico and Canada, and that of Russia as well, according to PolitiFact Texas.
Talk within the Trump administration of abolishing the North American Free Trade Agreement would prove harmful to the state’s economy, Hegar said. He urged the business community to push back against the idea.
“Does it need reviewing? Yes. But to rip it up and throw it away would be a bad idea for the state of Texas,” Hegar said.
Laredo has become the third-busiest port of entry among 29 in the United States that receive shipments of goods by land, sea and air, he said.
Before his talk with business leaders, Hegar ate lunch with Waco Mayor Kyle Deaver, McLennan County Judge Scott Felton and Waco Assistant City Manager Wiley Stem. Waco banker David Lacy, who serves as chairman of the Waco chamber’s public policy committee, and Jessica Attas, the chamber’s director of public policy, also attended the lunch.
Banker Rodney Kroll attended as a representative of the Waco Industrial Foundation, and Mark Reynolds attended as chairman of the chamber.
Attracting more manufacturing jobs “has been a 50-year priority of the city of Waco,” Lacy said during an interview.
“We’ve done well, but we can do better,” he said. “I’d like a few more high-tech companies sprinkled into the mix.”
Collins, who recruits industry, said the chamber’s pipeline of prospects considering a move to Greater Waco includes manufacturing companies, though she declined to discuss specifics of what they produce.
Addressing questions posed by attendees, Hegar said Hurricane Harvey inflicted $180 billion in damage on the Gulf Coast. Hundreds of thousands of residents suffered property damage due to flooding, but only an estimated 15 percent had flood insurance, he said.
“This event will not necessarily impact the state budget, but local communities are devastated,” Hegar said.
At least 100,000 vehicles were damaged, and the state will receive sales tax revenue on cars and trucks bought as replacements, helping to offset costs associated with assisting residents not receiving federal support.
He said property tax reform remains on the minds of many, especially as it relates to school funding, “which creates the bulk of the pressure.”
Texas proves attractive to business prospects because it has no state income tax, but high property taxes sometimes hamper negotiations, he said.
“Our sales tax generated $28 billion last year, 58 percent of our state revenue. But the list of things exempt from sales tax is longer than the list of inclusions,” Hegar said.
Broadening the list of items subject to sales tax could represent a solution to school funding squeezes, he said.
The Texas economy has created 300,000 jobs over the past year, and has averaged annual growth of 3.8 percent the last 20 years.
“Last year, it was down to three-tenths of 1 percent due to falling oil prices and the loss of 160,000 oil-patch jobs,” he said. “But during the first quarter of this year, the rate is back up to 3.9 percent.”