No More Hogs at the Trough: Chapter 313 Tax Incentives Will Blow a Hole in Our State and School Budgets
[Excerpt from Texas Observer]
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.
[Photo Credit: NonProfit Quarterly]
Money for Nothing and Your Chips Are Free, Texas Observer
No More Hogs at the Trough-Containing Corporate Subsidies in Texas, Nonprofit Quarterly
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
What Could Epic Samsung Expansion Mean for Texas?, Austin Business Journal
Point Isabel School District Rejects Texas LNG Tax Abatement, Brownsville Herald
'Smoke and Mirrors' or Long-Range Planning? Possible Samsung Tax Breaks Stir Debate, Austin American Statesman
Report: Samsung Adding Land to $17B Semi-conductor Campus in Taylor, Considering 11 New Facilities, KVUE
State Sees Rush of Tax Break Applications as Program Soft Deadline Approaches, KVUE
Friends of the Land, Bastrop Interfaith, Oppose Dogwood Creek Solar 313 Application to Elgin ISD, Elgin Courier
Austin ISD Moves Forward With Semi-Conductors Agreement, Faces Community Opposition, Community Impact
Austin ISD Considering Proposal That Would Help Lower Recapture Payments, Faces Opposition, CBS Austin
NXP Seeking Up To $140 Million in Tax Breaks for School Districts, Austin-American Statesman
Chapter 313 Incentives: What They Are and Why They're Suddenly the Talk of the Town, Austin Business Journal
Oped: Don't Ask Texas Schoolchildren to Fund Your Corporate Expansion, Austin Chronicle
Statement on Austin ISD and Round Rock ISD Chapter 313 Votes, Central Texas Interfaith
Samsung Ask Texas Taxpayers To Foot $4.8 Billion Bill For Future School Taxes. Governor Abbott Endorses Biggest Corporate Welfare Deal in Texas History, Central Texas Interfaith
Texas IAF Blocks $10 Billion Dollar Corporate Tax Giveaway to Big Oil
[Excerpts]
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.”
....As legislators met in a closed session to hammer out the bill, Greco heard from a colleague. “One of my organizers said there’s 20 oil and gas lobbyist standing outside this committee room,” he recalled.
Former Gov. Rick Perry, an Energy Transfer board member, tweeted his support for reauthorization. But as last week of the session ticked by, the bill didn’t come up. “It became clear that the reputation of the program had been damaged,” Greco said.
In 19 months, Texas’s subsidy program will expire, but that doesn’t mean the fight is over.
“We know there’s going to be a big conversation over the interim — we are under no illusions that this is not going to be a long-term battle.”
Organizers, though, recognize that the subsidy’s defeat marks a shift: “The table has been reset.”
In Blow to Big Oil, Corporate Subsidy Quietly Dies in Texas, The Intercept [pdf]
How Skeptical Texas Lawmakers Put an End to a Controversial Tax Incentive Program, Houston Chronicle [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 [pdf]
A Texas Law Offers Tax Breaks to Companies, but It's Renewal Isn't a Done Deal, Texas Tribune [pdf]
A Controversial Tax Program Promised High Paying Jobs. Instead, Its Costs Spiraled Out of Control, Houston Chronicle [pdf]
Losers and Winners from Chapter 313, Central Texas Interfaith
The Unlikely Demise of Texas’ Biggest Corporate Tax Break,Texas Observer [pdf]
Texas IAF Community Leaders Strategize for the Legislative Session
At the Texas IAF Statewide Legislative Strategy meeting, held in Austin, 200 leaders from nine Texas IAF organizations convened to build relationships, report on 2018 progress and prepare for the 2019 legislative session. Ernesto Cortes Jr., IAF National Co-Director, delivered a 'state of the economy' training before leaders broke out into smaller groups for workshops around school finance and property taxes, workforce development, and healthcare affordability.
Workshops were led by panels of IAF organizers and local policy experts, including: Josh Sanderson and Dr. Ray Freeman, Deputy Directors of the Equity Center; Michelle Smith, Director of Governmental Relations, and Libby Cohen of Raise Your Hand Texas; Neil Vickers, Executive VP of Finance and Administration at Austin Community College; and Anne Dunkelberg, Associate Director of the Center for Public Policy Priorities (CPPP).
In April, leaders plan to call on state legislators to invest more state funding in public schools, long-term job training programs and into healthcare affordability, in addition addressing local reforms around immigration, criminal justice and payday lending reform.
Texas IAF Leaders Develop Legislative Agenda
At a statewide convening of the Network of Texas IAF Organizations, leaders developed an agenda of issues to tackle in the upcoming legislative session. The top two issues will be immigration (stopping anti-immigrant legislation) and the ACE Fund (promoting full funding for investments in long-term workforce development). Several organizations plan on additionally tackling local control as it impacts local rental housing, property tax and bail reforms.