Why are Austin taxpayers subsidizing record revenue for Southwest Airlines?
City of Austin Press Release and KUT Story
At its very last meeting of the year, Austin city council unanimously approved giving Southwest Airlines $5.5 million of taxpayers’ money as an incentive to expand its operations at the Austin Airport by about 2,000 employees. The very next day, Governor Abbott announced that he was awarding an additional $14 million of state funds to Southwest for the expansion.
Southwest Airlines Press Release
This giveaway of nearly $20 million of taxpayers’ money comes less than two months after Southwest announced record revenues of $6.9 billion in the third quarter of the year and that they were returning $439 million to shareholders as a result.
This deal is a continuation of the kinds of business-as-usual corporate giveaways that we’ve been sold for the past three decades, despite the fact that studies routinely find that, most of the time, companies would have made the same decisions without public subsidies. There is an extremely high likelihood that Southwest would expand without $5.5 million dollars of Austin’s taxpayers’ money. Instead, Austin taxpayers are funding six months’ of Southwest CEO Bob Jordan’s salary .
Meanwhile, Austin just concluded an emergency budget-approval process after voters rejected Prop Q, resulting in cuts to services that Austinites rely on. Austin voters thought they sent a clear message to Council that we do not want our tax money spent in irresponsible ways. Apparently, Council didn’t hear them .
Bob Jordan, left, happy that he just got Austin taxpayers to fund half his $10,600,000 salary. Gov. Abbott, center, adding $14 million. Mayor Watson, right, is really enjoying this. Images from Austin American-Statesman article.
The expansion of Southwest could be good, especially as most of their workforce is unionized, but it is not responsible to unnecessarily gift them millions of taxpayers’ dollars at a time when Southwest is raking in record revenue while working people struggle to make ends meet.
We need new approaches to economic development in Austin, not the same old policies that have left too many people behind.
