Following an opposition campaign by Texas IAF organizations, Comptroller Glenn Hegar is backing away from his proposal to gut Chapter 313 reporting and accountability requirements in the program’s final year of existence. Hegar signaled the change Friday after significant pushback by Chapter 313 critics, including a press conference held by Texas IAF organizations in December, and a barrage of public comments submitted to his office against the proposal, with the largest portion coming from Texas IAF leaders.
During the 2021 Legislative Session, the Texas IAF, along with allies, stopped the reauthorization of Chapter 313, the State’s largest corporate tax subsidy program. Though the current program, which costs taxpayers $1-2 Billion per year, is set to expire in December of 2022, Comptroller Hegar had proposed in November to reduce the reporting requirements on jobs, wages, and overall costs to taxpayers.
“Comptroller Hegar has recognized the voices of voters from across the political spectrum, including our organizations, and now says the data we are concerned will continue to be available,” said Bob Fleming, a leader with The Metropolitan Organization, the IAF affiliate in Houston. “However, we remain vigilant because he says the rules will still be revised and made ‘more efficient’. Given the history of this failed and discontinued program, we need even more transparency and accountability, not less.”
[Photo Credit: Mark Mulligan, Houston Chronicle]
Network of Texas IAF Organizations, Press Release
Texas IAF Calls On State Comptroller to Abandon Plan to Gut Chapter 313 Subsidy Accountability Requirements
"Lawmakers have ordered Comptroller Glenn Hegar to wrap up Texas’s biggest corporate tax break program, but he wants to give companies one last gift: an end to public accountability.
Activists, corporate relocation specialists and lawmakers are scrambling to comment on Hegar’s proposal that companies no longer report key data about their progress toward meeting the terms of their property tax abatement agreements.
Interfaith groups that fought the corporate giveaway that hurts Texas children demanded Hegar roll back his plan on Wednesday.
“What is the benefit of less accountability and less transparency?” San Antonio state Senator José Menéndez asked at a Texas Industrial Areas Foundation press conference. “The taxpayer should know how their money is going to be used and what they are getting in exchange.”"
Texas Comptroller Proposes Covering Up Corporate Welfare Program, The Houston Chronicle [pdf]
When organizers set out to overturn Texas’s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas — with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenge it for the first time.
At the beginning of last week, as Texas’s biennial legislative session approached its end, the aims of organizers remained modest. “We thought it would be a victory if the two-year reauthorization passed so we could organize in interim,” said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program.
At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. “The bill never came up,” Greco told The Intercept. Organizers stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize....
“No one had really questioned this program,” said Greco, of Central Texas Interfaith.
The reauthorization was a once-in-a-decade chance to challenge it. “We knew in our guts that the program was just a blank check, but we also are very sober about the realities of the Texas legislature.” ....an unlikely coalition...emerged from across the political spectrum — including the right-wing Texas Public Policy Foundation, the progressive Every Texan, and [Texas IAF], which does nonpartisan political work among religious groups.
The Texas Chapter 313 defeat is the second recent win against multibillion-dollar oil and gas industry subsidies in fossil fuel states. Last fall, organizers in Louisiana beat back a ballot initiative designed to counteract dramatic reforms to the state’s industry giveaway program. In a state that leans heavily Republican, people voted down the constitutional amendment by a landslide.
Broderick Bagert, who helped organize the Louisiana effort, sees what happened in Texas as part of a turning of the tides in a region where industry has long ruled. “In a lot of cases, it’s not that these battles have been lost — they just haven’t been fought,” he said. “What you’re seeing for the first time is the battles being fought.”
....Bagert noted that Louisiana and Texas are two of a handful of states whose industries will decide what our climate future will look like. “The question of these subsidies is being tied more and more with the question of whether these changes in energy production that we need to save the planet are going to be made in time to save the planet,” he said. “It all boils down to the price of energy. Once industries have to bear the full cost of their production, including emissions and taxes and all the other things that have been subsidized, then it’s no longer advantageous, and that’s when things start happening.”
In Blow to Big Oil, Corporate Subsidy Quietly Dies in Texas, The Intercept [pdf]
Texas Legislature Dooms Chapter 331, Which Gives Tax Breaks to Big Businesses, Business Journal [pdf]
Missed Deadline Could Doom Controversial $10B Tax-Break Program, Houston Chronicle
Losers and Winners from Chapter 313, Central Texas Interfaith
The Unlikely Demise of Texas’ Biggest Corporate Tax Break, Texas Observer [pdf]
COPS/Metro Alliance leaders applauded Maruchan's decision to withdraw their application for tax incentives and welcomed the company to Bexar County. "We reiterate our support for economic development and job creation," said Fr. Steven Gamez, pastor of St. Philip of Jesus Catholic Church and leader with COPS/Metro Alliance. "However, we strongly believe that it is a mistake to offer public subsidies when most of the jobs would pay minimum wage; the free market will take care that and Maruchan's decision proves it."
COPS/Metro leaders had publicly raised questions surrounding this deal because of the impact on working families.... "We agree with Maruchan leaders that 'the additional tax revenues for betterment of the community,' especially bringing up the skills of our workforce. We look forward to working with Maruchan, as well as city and county officials, to create opportunities for those workers who will earn the minimum wage."Read more