"A massive corporate tax-break program in Texas expired in 2022, but before Dec. 31, state officials said an “extraordinary number” of companies tried to apply. Now, it could be up to the state legislature to deal with the stack of pending applications.
Over the years, critics argued certain requirements were whittled away and some companies were bringing few or low-paying jobs with little benefits. Some, including a coalition of interfaith leaders with The Metropolitan Organization, Central Texas Interfaith and Texas Industrial Areas Foundation Organizations, have called out the program as “corporate welfare” and for leaving the rest of the Texas taxpayers to essentially “make up the difference.”
“We pay our taxes. Parents, teachers, grandparents, alumni pay taxes towards our school districts and towards the state. So, we feel that that is something that every body is responsible for,” said Reverend Minerva Camarena-Skeith of St. John’s Episcopal Church."
[Photo Credit: KXAN]
Central Texas Interfaith
[Excerpt from FOX 7 Austin]
"The Austin ISD school board has voted against a multi-million dollar tax break for NXP, a semiconductor company...
"It is not fair that those who have the greatest ability to pay are the ones who don't want to pay a dime," Rev. Minerva Camarena Skeith of Central Texas Interfaith said.
The tax break called the appraised value limitation, or 313 agreement, lets potential businesses build property and create jobs in exchange for a 10-year limit on the taxable property value for school district maintenance and operation.
"We want more dollars for AISD and for every school district in this state. We want every child to have every opportunity they need," Rev. Miles Brandon with Central Texas Interfaith said."
NXP Fails to Gain School District Tax Incentives for Possible Factory Expansion, Austin Business Journal
With Weeks to Spare, Austin ISD to Vote on NXP Incentives, Austin Business Journal
Central Texas Interfaith Commends AISD Board for Rejecting Chapter 313 Deal with NXP, Central Texas Interfaith [pdf]
Dallas Area Interfaith
[Excerpt from Dallas Morning News]
"Amid pressure from community advocates, the Dallas schools administration pulled a vote to approve a property tax break for a manufacturing company just before trustees were to weigh in on it Thursday night.
The Texas Economic Development Act – commonly referred to as Chapter 313 based on its position in the tax code – will expire at the end of the month. Companies across Texas are rushing to get deals approved with school districts and lock-in tax abatements ahead of the deadline...
“Does it make sense to continue to grant certain large corporations these huge tax breaks?” Dallas Area Interfaith leader Bill deHaas said ahead of the meeting. “We already know that we have a crunch on educational spending.”
“While we want economic development and good jobs in Central Texas, these agreements prohibit school boards from enacting high living wage and worker safety standards as part of these agreements, unlike city and county incentives, in which good job standards can be negotiated,” said Carlota Garcia of the Central Texas Interfaith organization.
Garcia said these agreements are “Texas’ largest corporate welfare program, which costs taxpayers over $1 billion annually—money that could be going to public schools and other public needs. The state must replace the revenue that the corporations get out of paying in property taxes for 10 years by collecting more taxes from all Texans.”
“We’re not anti-economic development,” said the Rev. Miles Brandon of St. Julian of Norwich Episcopal Church and member of Central Texas Interfaith. “We believe that all of the dollars we can possibly put together in this state should go to educate our children.”
-Austin Business Journal
“We are a part of the AISD community,” Brandon said. “We implore you to choose your advocates and partners over corporations. It makes certain there will be $100 million less to fight for. It is in our children’s best interest now and in the future.”
-Austin American Statesman
[Photo Credit: Community Impact]
Possible Chapter 313 Agreement Between Austin ISD, NXP Draws Criticism, Community Impact [pdf]
Austin ISD to Vote on NXP Semiconductor's $100M Tax Break, Austin Business Journal [pdf]
Time Ticking for Austin School Board to Vote on Proposed Tax Breaks for NXP Semiconductors, Austin American Statesman [pdf]
Bastrop Interfaith and Friends of the Land, a farmland preservation coalition, worked with local Elgin residents and landowners to defeat a 10-year Chapter 313 corporate tax abatement at the Elgin ISD School Board last night by a unanimous vote. Solar Proponents, a startup owned by an oil and gas hedge fund, would have clear-cut over 2,100 acres of trees bisected by Little Sandy Creek to build an industrial solar farm. While the community had been testifying monthly since May at the school board meetings against the project, last night was the first time the public got to hear from Solar Proponent about the project. Speakers argued the project endangered Greenbriar Community School and neighboring homes with water runoff in an area already prone to flooding with an already diminishing refuge for wildlife.
“In these past six months, we haven’t heard a single person speak in favor of this project. Compare that to more than 1100 signers of our petition to stop this project and all the comments here you have so patiently listened to since then,” said Skip Connett, a leader with Bastrop Interfaith and founder of Friends of the Land at last night’s school board meeting.
“We spoke for our communities and our trees. Our school board listened,” Connett said after the vote.
This past May, Bastrop Interfaith and Friends of the Land, one of its member institutions, opposed the initial Chapter 313 application which would have given the company a 10-year school property tax abatement from Elgin ISD. Chapter 313, Texas’s largest corporate welfare program, costs taxpayer $1Billion/year to fund these tax breaks, money which could be going to public schools. Chapter 313’s reauthorization was killed last legislative session by Bastrop Interfaith and the Texas IAF along with allies. However, the program doesn’t expire until this December, and there has been a rush of nearly 500 applications by companies looking to get tax breaks before the deadline.
Reverend Minerva Camarena Skeith of St. John's Episcopal Church explains to Jon Stewart how Central Texas Interfaith/Texas IAF organizations fight corporate incentives that negatively impact public budgets, including schools.
“What’s happening right here, right now, very powerful.” -- Jon Stewart
In a Behind the Scenes Cut, Rev. Minerva Camarena-Skeith describes how communities can organize.
Full episode and panel discussion streaming on Apple TV+.
Central Texas Interfaith/Texas IAF Persists in Push Against Chapter 313 Corporate Subsidies at State Legislature Hearing
The Chapter 313 program, authorized in 2001, allows Texas school districts to cap the taxable value of a property for some new projects, saving companies tens of millions of dollars in taxes, or more. It is set to expire at the end of December, after a bipartisan coalition in 2021 stopped efforts to reauthorize the program.
Critics of Chapter 313 call it corporate welfare that deprives Texas public schools of funding....
Clock is Ticking on Texas' Chapter 313 Incentives -- and Major Projects May Miss Out, Austin Business Journal [pdf]
A section of the Texas tax code that is used by local governments as lucre to attract corporate relocations but that often ends up pitting city against city and school district against school district is set to expire.
Based on hearings last week, there will likely be calls to reinstate it in the next Legislature. That would be a mistake....
In 2015, Gov. Greg Abbott complained that each job created by this program cost taxpayers $341,000. Using Abbott’s calculation, the Houston Chronicle updated the numbers last year: now every job created by a 313 incentive costs $1.1 million, the paper reported.
What’s more, a 2018 study by the W.E. Upjohn Institute for Employment Research found that 313 incentives were the deciding factor in fewer than 25% of relocations, meaning three quarters of the time, the relocation would have happened anyway. Taxing districts are leaving money on the table and cities are fighting cities in a game that actually hurts their residents and students....
in many cases, the choice is not between attracting a company to Texas or failing to do so. The choice is between attracting a company to Taylor or Round Rock; Sherman or Plano.
That highlights another problem: 313 favors districts where it’s easiest to acquire land and build facilities. In an analysis by Dallas Area Interfaith, the losers under 313 are large, urban school districts like Dallas ISD.
[Graphic: Dallas Morning News]
Come December 31, 2022, the law that had allowed [major corporations] to keep more than $10 billion in school property tax revenue off the ledgers over two decades will be no more. But companies wasted little time grieving. There was still plenty of life to live after the session ended sine die.
Since then, companies have applied for close to 500 tax break deals for projects all over the state—for everything from wind and solar farms, oil and gas processing, carbon capture, and biodiesel production. By comparison, the Texas comptroller received an average of 90 applications annually in the past decade.
“It’s like hogs at the trough,” said Bishop John Ogletree, a leader with the Houston chapter of the [Texas] Industrial Areas Foundation, a faith-based coalition that helped bring down Chapter 313. “Multi-billion-dollar oil, gas, and tech corporations asking for school districts and taxpayer dollars to bolster their profits. If these applications get approved, it will blow a hole in our state and school district budgets for a generation to come.”
Unsure whether the state will revive or replace the program in the 2023 session, companies have grown increasingly aggressive in trying to lock in future tax breaks for speculative projects that may—or may not—come to fruition many years out.
No More Hogs at the Trough-Containing Corporate Subsidies in Texas, Nonprofit Quarterly [pdf]
The Sun is Setting on Chapter 313 Incentives, Austin Business Journal
Companies Lining Up for Future Tax Breaks as Texas Incentive Program Nears End, Dallas Morning News [pdf]
What Could Epic Samsung Expansion Mean for Texas?, Austin Business Journal
Point Isabel School District Rejects Texas LNG Tax Abatement, Brownsville Herald [pdf]
'Smoke and Mirrors' or Long-Range Planning? Possible Samsung Tax Breaks Stir Debate, Austin American Statesman [pdf]
NXP Seeking Up To $140 Million in Tax Breaks for School Districts, Austin-American Statesman [pdf]
Chapter 313 Incentives: What They Are and Why They're Suddenly the Talk of the Town, Austin Business Journal [pdf]
Oped: Don't Ask Texas Schoolchildren to Fund Your Corporate Expansion, Austin Chronicle [pdf]
Statement on Austin ISD and Round Rock ISD Chapter 313 Votes, Central Texas Interfaith
At the Point Isabel ISD Board meeting, Texas LNG sought last-minute approval for tax abatement through the expiring Chapter 313 program. Leaders from Valley Interfaith, alongside allied organizations, made the case to the board.
On a unanimous vote Tuesday night, the school district voted not to go forward with the applications.
Several Port Isabel area residents voiced opposition, both to Texas LNG on environmental grounds, and to the abatements, saying Texas LNG deserves to have to pay its fair share of taxes.
Valley Interfaith and the other objectors said Texas LNG doesn’t need the abatement because the project has been planned for years and the company has already decided to build the facility here.
“Valley Interfaith congratulates the superintendent and PIISD Board members for their willingness to look at the facts and reject this application for huge tax abatements for an LNG export terminal they
have long planned to build in the Port of Brownsville area,” said Father Kevin Collins, O.M.I. pastor of S. Eugene of Mazenod Church in Brownsville and Valley Interfaith. “They don’t need to take money from Texas school children to build a profitable LNG export facility at a time when the whole world is clamoring for liquified natural gas,” Collins said.
Point Isabel School District Rejects Texas LNG Tax Abatement, The Brownsville Herald [pdf]
Last year Texas IAF organizations led the charge to end Chapter 313, a program that had given away $10 billion in windfall tax breaks for corporations. However, hundreds of Chapter 313 applications are being filed in the rush to get in before the end of the program, including some with projects slated for decades from now.
“It’s like hogs at the trough,” said Bishop John Ogletree, an official with the faith-based Texas Industrial Areas Foundation, which has opposed the arrangements.
Meanwhile, lawmakers and interest groups have begun discussing how to craft a replacement during next year’s legislative session to keep the tax breaks flowing.
The Chapter 313 deals — named for their location in the state tax code — let companies slash 10 years worth of school property tax bills they otherwise would owe on newly constructed factories and energy projects.
Over the past decade the state comptroller’s office has received an average of about 90 applications annually from companies seeking the subsidy.
Since the Legislature adjourned at the end of May 2021, by comparison, records show companies have filed requests for more than 460 new tax breaks — about 400 in the past five months alone.
Typically, companies sought Chapter 313 tax breaks for projects two to four years in the future, with the occasional oil and gas facility taking six or seven years to complete. Since last May, however, companies have applied for 120 of the subsidies for facilities not scheduled to open until at least 2028. At least 10 won’t be online for a decade or more.
Despite the program’s demise, applicants “have figured out how to extend it,” said Rev. Minerva Camarena-Skeith, of Central Texas Interfaith.
Their strategy seems to be, “Just in case, let’s get 10 years of requests in in one year,” added Bob Fleming, of The Metropolitan Organization, the Houston branch of the Texas Industrial Areas Foundation. “I don’t know anybody who can forecast their needs 30 years out.”
....by slow-walking the end of a program they said was giving away too much money to corporations at the expense of Texas taxpayers, legislators have now put the state on the hook for billions of additional tax breaks that Texans will be paying off well into the middle of the century.
[Photo Credit: Mark Mulligan, Houston Chronicle]