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Lawmakers, business leaders tout benefits of Proposition 3 October 21, 2013
Business Press Correspondent
Local lawmakers joined with business leaders to urge support for Proposition 3 on in the Nov. 5 election as a boon to the aerospace industry and the Texas economy.
Former Deputy Secretary of Defense Gordon England, a Fort Worth area resident, said the aerospace and aviation industry is “the jewel in Texas" because it is a high-tech industry that will continue to be extremely important to the state economy.
England was also a keynote speaker Thursday at the Aviation & Aerospace Industry Manufacturing Summit hosted by Embry-Riddle Aeronautical University at the Dallas/Fort Worth Marriott Hotel near Texas Motor Speedway. England, along with several other Texas officials involved with aviation and economic development in the state, held a press conference in support of the amendment.
If approved, the proposed constitutional amendment authorized by Proposition 3 would extend the tax exemption on parts and equipment from 175 days, less than six months, to two years.
Under current law, local governments such as cities, counties and school districts can adopt freeport tax exemptions for up to 175 days but local leaders said that is not enough time for aerospace companies to warehouse the equipment and parts without paying taxes.
Approval of Proposition 3 would “level the playing field” for aerospace manufacturers that have built warehouses in Oklahoma to hold the parts and equipment tax-free for longer than Texas allows, said State Rep. Linda Harper-Brown, R-Irving, who sponsored to the bill to put the issue on the ballot.
If parts and equipment could be held longer in Texas, then the state would be the beneficiary of those warehouses and warehouse jobs, she said.
There has been no organized opposition to Proposition 3, officials pointed out.
State Sen. Kelly Hancock, R- North Richland Hills, said Texas is only one of nine states in the country where parts and equipment can be held tax-exempt for 175 days. That makes Texas less attractive to potential new producers looking to build new plants.
Texas is ranked in the top three nationally in aerospace and aircraft manufacturing. The industry contributes nearly $49 billion to the Texas economy and supports about 200,00 jobs, largely the result of the state's business-friendly policies and tax structure.
“If we pass Proposition 3, we could see a manufacturing renaissance with great benefits for Texas,” said State Rep. Tan Parker, R-Flower Mound.
England, who also once led General Dynamics’ plant in Fort Worth, now owned by Lockheed, said the U.S. needs to become more competitive with other global nations in aerospace manufacturing by training, recruiting and retaining more engineers. He pointed out that the U.S. ranks fifth in the world behind China, India, Brazil and Germany.
Only 4 percent of the college graduates turned out in the U.S. are engineers compared with 13 percent in Europe and 23 percent in Asia.
But most alarming, he said, is that one-third of all teenagers in the U.S. drop out and don’t graduate from high school at a time when the peak crop of current engineers is growing older and nearing retirement.
He encouraged more innovative teaching of science and math, including project-based “hands on” experiences.
Engineering is a field that pays well and offers abundant opportunity, he said, adding that aerospace manufacturing, as a high tech industry, is more sustainable for the economy than anything that “comes out of the ground,” including oil and gas.