Clip 7: State to withhold funding for Lubbock trade center Director says decision will force Texas Tech site to close
By PETE SLOVER
The state comptroller notified an international trade center in Lubbock on Monday that its funding will be withheld, after an audit showed the center generated less than one-third of the economic activity previously reported to the Legislature.
Unless the decision to freeze $600,000 in annual funding is reversed, the Northwest Texas International Trade Center at Texas Tech University will close, said Craig Beene, director of the federal Small Business Development Center that hosts the program.
Last month, Comptroller Carole Keeton Strayhorn ordered the center to document its performance claims, after The Dallas Morning News reported a host of irregularities in executive director Pat Helton's conduct and skepticism about its economic development activity.
The program has operated without funding since the fiscal year began Sept. 1. For its money to be released, the center has to show that its performance predictions issued during the legislative session have been fulfilled.
In early February, Mr. Helton asked for the money to be cut loose, affirming that the center had generated $182 million in foreign trade deals over the previous two years.
Mr. Helton resigned on the eve of the news account of his activities. When Tech staff audited records, the numbers were revised downward to $51 million.
Mr. Beene said that Mr. Helton improperly counted deals in progress as though they were completed. In an interview before he quit, Mr. Helton said he kept no list of the transactions that made up the trade figure he reported.
In a letter sent Monday, Deputy Comptroller Billy C. Hamilton informed Mr. Beene that the lower figure was insufficient to support an appropriation. The Legislature's allocation was contingent upon the center generating a profit - with tax revenue generated from its projects exceeding agency costs. By the comptroller's estimate, deals claimed by the trade center accounted for $1.01 million every two years, $194,000 short of the program's $1.2 million budget.
"The material does not support the appropriation," said James LeBas, chief revenue estimator for the comptroller, adding that the budget bill doesn't allow for partial funding if revenue falls short. "I'm reading it that it's all or nothing."
The comptroller said that the trade center would be allowed to make a case for reversing the decision. Mr. Beene said he may present evidence of additional deals found since the previous accounting, which he said was completed quickly to meet a deadline set by the comptroller.
If the tax income generated by the program still falls short of its budget, he said, he plans to argue that the funds should be reduced proportionately, not eliminated entirely.
