More Tech Gains for the Lone Star State

The State of Texas, recipient of $22 billion in migrated wealth between 1995 and 2010, continues to reap the rewards of being a welcoming home for new businesses. As a part of its allure, the state offers companies about $19 billion per year in incentives, the highest amount of any state in the union. Home to Dell Computers and Texas Instruments, the Lone Star State is luring more tech companies and rapidly becoming a hub for the electronics and telecom industry. Governor Rick Perry’s latest coup was the recent announcement that Motorola Mobility, owned by Google and headquartered in Illinois, will be manufacturing their new smartphone, Moto X, at a shared facility in Fort Worth.

Mark Randall, Motorola senior vice-president of supply chain and operations, cites existing infrastructure, a large tech-savvy talent pool, and a very business-friendly tax environment as some of his reasons for this move. It certainly bears mentioning that Texas has neither a personal nor corporate income tax. This will mark the first time smart phones have been manufactured in the United States, and will bring with it an estimated 2,000 jobs. Texas is now home to a mix of larger companies and young entrepreneurs. As you might expect, they are coming in droves from Illinois, California, and other high-tax tech centers around the country.

California Governor Jerry Brown may pontificate about the growing economy and favorable business climate of his state. He may heatedly deny the fact that companies are pulling up stakes and fleeing California because of oppressive tax policies. He may try desperately to convince his constituents that raising taxes even higher is for the general good. But the bloviating isn’t working, businesses aren’t buying it and their exodus from California rolls on.

Following in the wake of Motorola’s move, Raytheon Space and Airborne has announced that is now moving its headquarters staff from El Segundo, California to McKinney, Texas. This is yet another in a list of high-profile corporations fleeing California. While Texas gains only 200 jobs in this move, Raytheon plans to condense its six business units into four by merging two units and eliminating one. As part of that reorganization, Integrated Communication Systems and Advanced Programs will be folded into Space and Airborne Systems, so there is no telling how many new jobs will be generated in the long run.

Since the most recent election and the approval of Proposition 30, plus Governor Perry’s recruiting efforts, the city of Austin, Texas, has experienced a doubling or even tripling of relocation inquiries from California companies. Once again in 2013, more than 500 CEOs have ranked Texas as the best state in which to do business, according to Chief Executive magazine’s annual Best and Worst States survey. Texas has held this position for nine years in a row. CEO rankings take into consideration many factors, including regulations, tax policies, workforce quality, educational resources, quality of living, and infrastructure.

No matter how you look at it, the name of Texas is coming up often in California boardrooms, and in a vernacular you would expect from a proud Texan: “It ain’t braggin’ if it’s true.”