SAN ANTONIO, Texas — Gov. Rick Perry said Wednesday that legislative leaders have agreed to tap $15 million in leftover funds from a defunct state program to pay for an eight-mile railroad spur deemed crucial to attracting a Toyota manufacturing plant to Texas, according to the Houston Chronicle.
The commitment to shift funds from the former SmartJobs program to a newly formed Bexar County rural rail district rounds out the state’s Toyota incentive package, which was designed to compete with a similar multimillion-dollar proposal from Arkansas, Perry said.
The funds transfer will only happen if Toyota agrees to build a plant in Texas — a decision the company is expected to make by February. Perry said the plant would create 4,000 jobs.
The SmartJobs program, which provided job-training subsidies, was axed by the Legislature in 2001 due to a history of fiscal mismanagement. Even though the program was eliminated, using its unspent funds for other purposes requires approval of the Legislature, which convenes next month.
The new rail spur would allow Burlington Northern-Santa Fe Railway, currently with no facilities near the proposed plant site in south Bexar County, to connect its rails to the plant. That would answer Toyota’s demand to have at least two competing railways serving their facility.
Union Pacific already has rails near the possible site but so far has not agreed to share its tracks with competitors. Although negotiations between the two railroads continue, Perry and local leaders said it was a strategic necessity to assure Toyota immediately that competing rails would be available.
Perry said Lt. Gov.-elect David Dewhurst and state Rep. Tom Craddick, R-Midland, presumably the next House Speaker, were joined by a bipartisan coalition of lawmakers in agreeing to advocate the funds transfer. The state funds, plus a $5 million local commitment, will fully pay for the rail spur, he said.
“As governor, I am 100 percent committed to removing all obstacles to a successful partnership between Toyota and Texas. Today, we are overcoming the biggest obstacle to this marriage, which is access to affordable rail shipping,” Perry said.
“We regret that discussions with Union Pacific have not yet yielded a solution, but that’s not going to slow us down and keep us from making San Antonio as attractive as possible for the new Toyota plant.”
Mayor Ed Garza said the state’s contribution was an important final element in the city’s Toyota bid, whose overall value has been estimated at more than $100 million. Garza, who planned to visit Union Pacific officials in Omaha, Neb., this week, canceled the trip when that railroad and Burlington Northern resumed stalled negotiations last week.
“This is the last issue,” he said, referring to the rail question.
“The Toyota officials have been patient. We have been very serious in our message, as the governor stated, that we will get this done one way or another,” Garza said.