Texas lawmakers introduced a bill Tuesday that would abolish the state’s technology investment fund after spending this past summer criticizing the program for misusing state funds.
If approved, the bill would put an end to the Texas Emerging Technology Fund, which since 2006 has invested state money in technology startup companies to help them build their business in the state. The aim was to create jobs and generate additional tax revenue.
The measure put forth Tuesday in the state’s House of Representatives would end the fund on Sept. 1, 2015, and disperse the remaining funds back into the state’s general fund.
This past August, a panel of state house members formed to determine the fate of many of the state’s economic development incentive programs, including the emerging technology fund.
According to the Austin Business Journal, the lawmakers at the time wanted more transparency brought into the fund that has funneled more than $200 million to startup companies since its inception.
The fund, which Gov. Rick Perry pushed legislators to create, has resulted in more than $220 million in economic activity, according to a report released by Perry’s office last January. Lawmakers in August, though, were having trouble finding the proof behind those numbers and some felt it’s not the government’s job to play venture capitalist.
“I don’t think our job should be gambling with the people’s money, like you do with your business when you’re investing,” state Rep. Poncho Nevarez, a Democrat from Eagle Pass, Texas, told the Houston Chronicle this summer.
There is belief that with Perry leaving office in a few weeks – he declined to see re-election after 14 years in office – that the state was losing the fund’s biggest supporter and that it could be time for the fund’s opponents to strike.
State investment funds, especially in technology, are nothing new. Texas, along with states like Maryland, have run funds like these for years in hopes of increasing economic activity in the state.
Just last week, New York announced the creation of a $50 million venture capital fund aimed at helping the technology created in the state’s universities and research centers to the marketplace.
“New York is home to some of the brightest minds in the world – and by launching this fund, we’re helping these budding entrepreneurs bring their ideas to market right here in the Empire State,” New York Gov. Andrew Cuomo said in a statement upon the fund’s launch. “With this action, we’re continuing New York’s legacy of innovation, as well as making another solid investment in this state’s future.”
Detractors of such funds, though, believe that government should not be investing in the private sector in this way and that public sector entities lack the experience and expertise to invest these funds properly.