"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]
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]
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]
When NXP sprung a request for a Chapter 313 tax subsidy before the Austin Independent School District, Central Texas Interfaith leaders decided to descend upon a meeting of the Board of Trustees to ask them to reject the request. Chapter 313 tax subsidies are 10 year tax breaks to major gas, oil and manufacturing corporations that drain $1 Billion from state coffers on an annual basis. In response to a barrage of 20 CTI leaders testifying over the phone and in person against the tax giveaway, NXP (the company requesting the subsidy) changed the number of promised jobs on their application during the meeting from the statutory minimum of 25 to 500 overall.
The majority of community members who provided testimony on May 19 asked the board to vote against the Chapter 313 agreement with NXP. [Twenty] speakers were members of Central Texas Interfaith, a nonpartisan coalition of congregations, schools and unions that opposes Chapter 313.
“Hardworking taxpayers don’t get this kind of giveaway. Nor do small businesses, or responsible corporations,” said Central Texas Interfaith leader Trenton Henderson. “We want our money to go to public schools, but not to pay the bills for corporations shirking their responsibility to public education. Without a Chapter 313 agreement, NXP would have to pay their full share of school taxes.”
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]
AISD Board Meeting Broadcast, Austin Independent School District [calls begin at -2:33:30, in person testimony at -1:52:30]
Rev. Paul Skeith from SoCo Episcopal Community and Central Texas Interfaith (CTI) testified at the Travis County Commissioners Court to advocate that any private company receiving public tax subsidies from the county pay living wages, benefits, a career track, and strategy to hire locally. The Court subsequently adopted these and other worker safety measures as part of a package advocated by CTI congregations and member institutions including Workers Defense Project, LIUNA, and Central Texas Building Trades.
On Tuesday the Travis County Commissioners Court held a discussion on “Project Silicon Silver,” widely speculated to be the alias for chipmaking giant Samsung’s development contract. The discussion centered around acceptance of the preliminary application, along with a corresponding $150,000 fee paid out to the county by the developer.
The county is considering providing financial benefits in exchange for Samsung’s adherence to worker protection, wage, compensation, OSHA requirements and more.
Several citizen callers also stressed the need for county stipulations, including a living wage indexed to cost of living, local employee minimums and health insurance benefits for employees.
Father Paul Skeith of SoCo Episcopal Community advocated for all of the above issues, in addition to the opportunity for employees to rise within the company.
Jessica Wolff with Workers Defense Project highlighted the strengths of the development standards, citing the local hiring requirement, construction training requirement and anti-retaliation provisions, and called for the standards set in this policy to become the county norm.
”We recognize this is a great first step and there’s still more work to be done,” Wolff said.
On Tuesday, voters rejected the idea in a landslide. All 64 parishes, including GOP and Democratic strongholds, voted against it. Almost as many Louisiana voters rejected the proposed Constitutional Amendment 5, as it was known, 1.22 million, as voted for President Donald Trump, 1.25 million.
“You’re talking about liberal, conservative, Black, White, Democrat, Republican, Independent, it failed by a landslide,” said Edgar Cage, an organizer with Together Louisiana, which rallied against the amendment. “This should be a clear message to the Legislature that the taxpayers, the people of Louisiana are tired of these corporate tax exemptions and giveaways.”
On Tuesday morning, Khalid Hudson, a Together Louisiana organizer, hopped in a white Chevy Silverado at City Park in Baton Rouge as a volunteer riding shotgun used a PA system to get several dozen supporters lined up behind them. A caravan took shape, as a line of cars and bicycles adorned with signs that said “No on 5” and “Stop corporate welfare” followed Hudson on a route that took them past a host of precincts in predominantly Black areas of Baton Rouge that saw low turnout in the early voting period. A crop of volunteers followed on foot for the journey across Old South and north Baton Rouge.
With the presidential election sucking up most of the oxygen, Hudson said Together Louisiana wanted to get out their message on Amendment 5, which was placed far down the lengthy ballot and asked voters, “Do you support an amendment to authorize local governments to enter into cooperative endeavor ad valorem tax exemption agreements with new or expanding manufacturing establishments for payments in lieu of taxes?”
Edgar Cage, a leader of Together Louisiana, a statewide network of congregations and civic organizations, and an opponent of the Amendment, called it “corporate welfare” and another tax loophole that allows corporations to avoid paying their fair share.
Sixty-three percent of Louisiana voters, or a total of 1,221,197, voted against the amendment.
Amendment 5 Opponents Say Louisiana Lawmakers Should Take the Amendment’s Defeat to Heart, Louisiana Illuminator [pdf]
...Members of the community are asking why a major New Orleans employer is asking for a tax exemption on years-old additions made to their facilities. The watchdog group Together New Orleans says Folgers Coffee Company, with two locations in New Orleans East, should owe the city millions in taxes on additions at their plants dating back to 2017.
It has people like Shawn Anglim, who helped create Morris Jeff Community School, concerned for the entities that could be receiving much-needed tax money during a pandemic.
“We are not really asking for much, we’re asking for Folgers to follow the law,” Anglim said.
The law Anglim mentioned, requires businesses like Folgers to pay taxes on personal property, machinery, equipment and merchandise.
While labor rights activists support Tesla’s stated commitment to a minimum wage of $15 an hour, substantially above Austin’s $7.25, the agreement sheds no light on which workers this standard applies to. The average hourly rate for manufacturing jobs in the U.S. is $22.
“The fear is that a company like Tesla keeps its high-level creative jobs in places like the Bay Area and begins to see Austin like a low-wage, high-tech town,”
said Doug Greco, lead organizer of Central Texas Interfaith, representing a coalition of nonprofit groups in Austin.
[Photo Credit: Cyber Truck: Tesla; Map: Lasagnaforone / Getty]