Concerned with the rampant investment of public funds for private gain, the West/Southwest IAF held a “Public Funds for Public Good” seminar with Labor Economist Teresa Ghilarducci (New School), and Economist Rick McGahey (Schwartz Center). They were joined by 90 leaders representing 10 West/Southwest IAF Organizations.

According to MLive Media Group, billionaires like the DeVos and Ilitch families have, for eight years, benefited from Michigan’s Transformational Brownsfield tax incentive program, which funnels billions of public dollars into huge private developments meant to revitalize abandoned spaces and attract workers.

“But to (Together West Michigan Leader) Satorie Spicer, 28, born and raised in Grand Rapids, these projects are ‘not for us.’

Despite San Antonio facing a staggering $5 billion infrastructure shortfall, many elected leaders are poised to spend $800 million in public funds to finance another Spurs basketball arena.

COPS/Metro, seeing through the project’s complicated funding structure, continues to be a leading voice for using this public money for the public’s benefit. At an August 5th commissioners court meeting, COPS/Metro Leader Rena Oden testified:

“It is unconscionable that you want to give this money for an arena when we have people dying from infrastructure or lack thereof. … Don’t tell us this money is only for arenas. Where is your imagination for our families? In the early 2000s, we voted on the venue tax where there was community benefit for all of us. This deal has no community benefit.” 

[Excerpts]

Door after door, the response was the same: “Why would I vote? It’s not going to change anything.” Even in Grand Rapids, one of the key swing counties of the 2024 election, people felt despondent—powerless. But three months later, those neighbors had organized with hundreds of others in the city to win $20 million for their community—and that sense of powerlessness was changing...

[Excerpt]

Chapter 313 was one of the country’s worst examples of crony capitalism, funneling billions in Texas taxpayer dollars to out-of-state interests. The program still costs Texas taxpayers over $1 billion a year in tax breaks to major oil, gas and manufacturing companies — money that could go to educating our children.

Dallas Area Interfaith, the Texas IAF, allies and a bipartisan group of legislators killed the reauthorization of Chapter 313 in the 2021 legislative session. Rather than leaving the program in the grave, industry groups are actually proposing to resurrect Chapter 313 this legislative session and make it worse in the form of House Bill 5.

Last September, in a House Ways and Means Committee hearing, industry groups painted an apocalyptic vision of Texas’ economy without Chapter 313. Their statements were based on opinion. Fortunately, we can look to Louisiana to see if their fears are merited.

In 2016, Louisiana reformed its version of Chapter 313, the Industrial Tax Exemption Program. The reforms generated $760 million in new tax revenue for schools and other public entities with no negative impacts on jobs. In fact, capital expenditures grew after the reforms.

Louisiana’s experience mirrors studies on economic development incentives. The Upjohn Institute found that “75% to 98% of the time, the same decision would have been made without the incentive.”

Similarly, a 2017 University of Texas study of Chapter 313 estimated that between 85% and 95% of Chapter 313 projects would have been located in Texas without the incentive. These incentives matter much less than other factors such as the labor force, education, infrastructure and access to markets and materials.

[Image Credit: NewsArt.com/Chris Van Es]

Paying for the 'Texas Miracle', Dallas Morning News [pdf]

Texas House Passes Plan to Bring Back Corporate Property Tax Breaks for Major Projects, Dallas Morning News [pdf]

[Excerpt]

"Gov. John Bel Edwards sided with New Orleans officials Monday by denying tax breaks sought by Folgers Coffee Co. that would have cost the city millions of dollars in property tax revenue....

ITEP has become a hot-button political issue in recent years. Business groups argue that allowing companies to avoid taxes they would owe on new equipment and machinery encourages those types of investments. Critics, led by Together Louisiana, argue that companies have been allowed to skip out on taxes from investments that they would have made anyway and that schools and sheriffs need the taxes to improve the quality of life in their communities.

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."

Austin ISD School Board Rejects Tax Break for Semiconductor Company, Fox 7 Austin

Austin ISD School Board Denies Tax Break for Semiconductor Company NXP with Narrow Vote, KVUE ABC

Austin ISD Board Considers Chapter 313 Tax Break for Semiconductor Company NXP, KVUE ABC

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

AISD Board to Vote on Contested Tax Breaks for Billion-Dollar Semiconductor Company, KXAN

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.”

Dallas ISD Punts Tax Break Ask from Manufacturing Company Ahead of Chapter 313 Expiration, Dallas Morning News

When petrochemical companies operating in rural Louisiana attempted to directly negotiate an industrial tax discount with the local parish (county), the effort ran up against the Louisiana Constitution. The local tax assessor sued and the state courts ruled that the agreement violated the Constitution. Developers then crafted House Bill 444, a constitutional amendment that would legalize direct negotiations with local governments. The amendment would allow corporations to work around Industrial Tax Exemption Program reforms recently won by Together Louisiana.

Before a packed house of leaders from Together Louisiana, and after eight intense rounds of public testimony, the Louisiana Board of Commerce and Industry voted to defer all renewal applications for industrial tax exemptions, including an application for property tax breaks by Koch Industries which would have cost (disaster-declared) East Baton Rouge Parish $1.9 million in revenue.