Morgan Stanley gets millions in taxpayer money to expand in Texas

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(The Center Square) – Multi-billion-dollar and trillion-dollar companies continue to receive taxpayer funds to expand operations in Texas. 

The latest is Morgan Stanley Services Group, Inc., which has a $314 billion market cap valuation, as of Sept. 28.

The financial services company is establishing a new hub in Dallas and receiving nearly $44 million in taxpayer money to do it. 

The company says it’s making a $684 million capital investment in the new hub that will create more than 3,800 jobs. It’s receiving a Texas Enterprise Fund (TEF) grant of $43,849,500 and a Veteran Created Job Bonus of $40,000. These exclude local tax breaks and incentives.

Gov. Greg Abbott praised the expansion, saying in a statement, “Texas is the financial capital of America.” Morgan Stanley’s expanded investment in Texas is due to the state’s “depth of talent and access to America’s rapidly expanding financial center.” North Texas is where Texas’ new stock exchange is located and where Fortune 500 companies are relocating their headquarters and expanding business operations. The region is attracting “the world’s leading brands across industries. Opportunity’s address is now Y’all Street,” he said. 

Morgan Stanley EVP Eric Grossman said the expansion “reflects our commitment to investing in markets that offer exceptional opportunities for growth, innovation, and talent. With a thriving financial services industry in Texas, we are excited to establish Dallas as a strategic hub for our firm to serve clients and attract top talent in the years ahead.” 

Dallas Mayor Eric Johnson, who left the Democratic Party in 2023 opposing tax increases, said, Morgan Stanley’s investment in Dallas “reflects what we have worked hard to build in Dallas: a safe, business-friendly, opportunity-rich city where leading companies can invest, grow, and attract the world-class talent they need to succeed. The message to the business world is clear: Dallas has become one of America’s premier destinations for financial services and a place where ambitious companies come to build their future.”

Johson has previously invited New Yorkers and others from blue cities to relocate to Dallas, which he refers to as “sanctuary city from socialism,” The Center Square reported.   

Critics argue TEF is corporate welfare and companies would expand operations in Texas anyway because of Texas’ business friendly policies. The grants impose additional costs on cities “in the form of reduced revenues and increased liabilities,” and there’s no meaningful measurement to quantify incentives to economic well-being, the Better Cities Project has argued, The Center Square reported.

The Texas Public Policy Foundation argues TEF should be eliminated and has proposed an alternative solution, noting that “The interstate subsidy race represents an ever-spiraling stairway to more government intervention in the market.” 

State Rep. Brian Harrison, R-Midlothian, said that Morgan Stanley getting millions in taxpayer money was another example of “Outrageous corporate welfare. Morgan Stanley does not need $44 MILLION of my constituents’ hard-earned money. Politicians (in both parties) need to stop robbing taxpayers blind to give money to rich corporations! END CORPORATE WELFARE!!! END PROPERTY TAXES!!!!”

Morgan Stanley is the latest company to receive millions in taxpayer funds. Last week, the trillion-dollar pharmaceutical giant Eli Lilly received a $5.5 million TEF grant. SpaceX, valued at more than $1.7 trillion, received $30 million in TEF grants and two local school districts are losing millions of dollars in property taxes through another JETI grant, The Center Square reported. 

The Center for Economic Accountability has long called on the governor and legislature to end TEF and other taxpayer funded grants, arguing they “make local economies less free, less fair, less inclusive, less resilient, less entrepreneurial, less innovative and more biased in favor of large incumbent businesses.

“Academic research and real-world experience demonstrate that economic development incentives do not create any more jobs or economic growth than would have happened otherwise,” The Center Square reported.