New Research Out of Texas Illustrates the Economic Damage Caused By Anti-LGBT Legislation

By Megan Clayton • December 6, 2016 • 1:59 pm

As Texas lawmakers prep for the 2017 legislative session, bills targeting lesbian, gay, bisexual and transgender (LGBT) people for discrimination appear to be at the top of their agenda. But two new studies from the Texas Association of Business (TAB) illustrating the magnitude of the economic damage these bills could do should cause them to think twice.

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According to the TAB research, these losses could include as much as $8.5 billion in economic output and 185,000 jobs, findings that mirror the evidence from North Carolina, where the discriminatory HB 2 is again making headlines after costing outgoing Governor Pat McCrory to lose his re-election bid.

The report is part of a new, business-led effort in Texas called Keep Texas Open for Business. The campaign will raise awareness about the economic impact of anti-business, anti-LGBT legislation. The full economic impact survey is available at www.keeptxopenforbiz.com.

The new study compared economic data from states that passed “religious freedom” legislation prior to October 2015, including Indiana. It also looked at supplemental economic data from North Carolina—whose HB 2 prevents transgender people from using public restrooms—and Mississippi, which also passed legislation targeting transgender people in early 2016. Texas Lieutenant Governor Dan Patrick is already saying he’ll make pushing HB 2-style legislation a priority during the 2017 legislative session, despite concerns from political and economic leaders, including House Speaker Joe Straus and Phillip Jones, the head of Visit Dallas, the region’s convention and visitors’ bureau.

Both the Speaker and Jones have reason to be worried. The TAB study showed major economic losses from anti-LGBT, anti-business legislation, especially in the tourism industry.

The draining of 185,000 jobs would be an effect similar to what Indiana saw after the legislature there passed its own RFRA in 2015. Many of these lost jobs came from lost convention bookings and other tourism activity. In Texas the tourism sector has a direct economic impact of $69 billion, generates more than $6 billion in state and local tax revenues, and directly and indirectly supports more than 1.1 million Texas jobs. The tourism industry has also been hit hard in North Carolina, where the NBA, NCAA and ACC all pulled championship games out of the state over HB 2.

But perhaps the most pronounced economic effect according to the study would be a decline in Texas’s overall GDP, which is currently the second-highest GDP among all US states. That decline could be as little $964 million or as high as $8.5 billion.

The study also warns that anti-LGBT bills will make it exceedingly difficult for companies to attract and retain the best talent. In North Carolina, companies including PayPal, Deutsche Bank and CoStar all canceled planned expansions into the state because of HB 2, costing jobs and cutting revenue. The TAB report singled out large, globally-recognized companies that do business in Texas like Apple, Google, Starbucks, British Petroleum, Marriott, IBM, PayPal and the National Football League—which have opposed this amendment and similar ones—as especially susceptible to negative economic effects.

Matt McTighe, Freedom for All Americans’ executive director, said this report makes it clearer than ever that there is both an economic and a political cost to anti-business, anti-LGBT bills.

“North Carolina’s governor was just voted out of office because of his support for a discriminatory law that took an immediate and devastating toll on his state’s economy. It’s not surprising that business leaders and elected officials from across Texas are sounding some early alarm bells over Dan Patrick’s fixation on similar legislation. We hope the lieutenant governor listens to these diverse constituencies from across his state, who increasingly have no appetite for a legislative fight that will end up hurting Texas’ economy.”

Lieutenant Governor Patrick’s desire to push anti-LGBT, anti-business bills in 2017, business leaders from the state are teaming up in opposition. Last month, more than 200 small business owners in Texas signed a letter speaking out against anti-LGBT legislation.

If you’re a Texas business owner or community leader and you agree that these bills are bad for Texas economy, you can join our coalition against them by signing our Keep Texas Open for Business pledge.


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