The original sales pitch for the big #Chapter313 tax breaks?

It sprang from a typo!!!

Today #txlege has a chance to reverse that 20-year-old error.

houstonchronicle.com/news/investiga… #txed 1/12
#txlege created #Chapter313 in 2001 on the premise that TX needed to compete more aggressively for manufacturing jobs. High property taxes represented a barrier to industrial investment, bill author Rep. Kim Brimer and his allies said. #txed 2/12
Their solution: Create a program that temporarily caps property values and shelters billions of dollars in investments from being fully taxed by #txed school districts. It's now called #Chapter313. #txlege 3/12
One of the main talking points of #Chapter313’s supporters came from a Site Selection magazine report showing that Texas had lured only three manufacturing companies in 2000.

houstonchronicle.com/news/investiga… #txlege 4/12
Supporters warned that meant Texas ranked 37th among states for new manufacturing facilities, an alarming drop after years spent near the top of that leader board.

There was a problem with that evidence, however: It was a misprint.

#txlege #Chapter313 5/12
Texas had ranked 6th or higher in the four years preceding 2001, a #txlege Senate committee report from 2016 found, and actually ranked 8th in 2001 — not 37th.

The report listed multiple examples of businesses flocking to Texas — all without #Chapter313 subsidies. #txed 6/12
“Although the error may have been in good faith, it was especially egregious in light of the fact that, not even six months earlier, Site Selection magazine published a 10-article spread about Texas,. #Chapter313 #txed #txlege 7/12
Mark Arend, editor in chief of the magazine, confirmed that the information in the chart was a mistake.

“That ‘three’ was erroneous,” Arend said.

#Chapter313 #txlege #txed 8/12
The actual number was 73 — more than six dozen manufacturing firms came to Texas in 2000, he said, securing its place as a top contender for new businesses. #Chapter313 #txed #txlege 9/12
The flawed claim that Texas ranked 37th in attracting new manufacturers should have been challenged by the industry experts who testified in favor of the legislation that created #Chapter313, the #txlege Senate report said. 10/12
But the incorrect number and ranking have been repeated dozens of times over the years in the media and by special interest groups.

houstonchronicle.com/news/investiga…

#txlege #Chapter313 #txed 11/12
“The case for passing the largest economic development incentive program in the state’s history may have been based on the fear incited by a magazine’s typographical error,” the #txlege Senate report on #Chapter313 concluded.

houstonchronicle.com/news/investiga…

12/12

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More from @dlavine

22 May
Houston Chronicle editorial: Ordinary Texans are regularly expected to bear the burden of $billions in corporate welfare to some of America’s wealthiest companies under the false premise that we’re all benefiting somehow.

houstonchronicle.com/opinion/editor… #Chapter313 #txlege #txed 1/21
While the arrangement is sold as a way to lure new business to Texas and create well-paying jobs, a Chronicle investigation, Unfair Burden, revealed how #Chapter313, the state’s biggest tax incentive program is a wasteful boondoggle.

houstonchronicle.com/opinion/editor… #txlege #txed 2/21
The #Chapter313 program, named for the section of the Texas Tax Code that enables it, lets companies keep a portion of their property values off of school district tax rolls for a decade. #txlege #txed 3/21
Read 21 tweets
22 May
Texas’ Largest Corporate Welfare Program Is Leaving Companies Flush and School Districts Broke

#Chapter313 program offers steep discounts on property taxes to attract big industrial projects that are supposed to pay off over the long term.

texasobserver.org/texas-largest-… #txlege 1/9
But by the time these projects return to the tax rolls, much of that value has disappeared. #txlege created the #Chapter313 program 20 years ago in response to fears that high property taxes were preventing corporations from pursuing large-scale projects in Texas. #txed 2/9
That fear was later found to be untrue, but the #Chapter313 program has been wildly popular. As of 2019, there were 509 active deals that will deliver a total of $10.8 billion in tax breaks to corporations. #txlege #txed 3/9
Read 9 tweets
21 May
The Texas Public Policy Foundation and Every Texan release a joint statement regarding extension of the #Chapter313 program of school property tax abatements. These tax breaks do not deliver the promised benefits, shift school funding costs, and waste tax dollars. #txlege 1/10
“Texas is fortunate to not need #Chapter313 incentives to persuade companies to locate here. Research and experience show that abatements are an unnecessary and wasteful perk and companies would have come to Texas regardless. #txlege #txed 2/10
But the #Chapter313 carve-outs do have a real impact on our ability to adequately fund all public schools and ultimately shift the responsibility for supporting them onto other businesses, homeowners, and renters. #txlege #txed 3/10
Read 10 tweets
21 May
A #Chapter313 renewal would require major revisions: The contracts should be negotiated and governed by economic development experts. Mandate more independent auditing for compliance.... expressnews.com/opinion/commen… #txlege #txed 1/6
Only approve the select few #Chapter313 agreements that truly require the tax abatement to lure them to Texas. Eliminate job-creation waivers... #txlege #txed 2/6
All #Chapter313 money must be accounted for in school funding formulas to create the most level playing field for all schools across the state... #txlege #txed 3/6
Read 6 tweets
10 May
So all this I hear about #Chapter313 payments to school districts? Who wins and who loses? #txlege #txed 1/6
If a company just paid its fair share of school taxes then, because local property tax revenue would go up, state aid would go down (or recapture increase), and the district revenue per student would be unchanged. That’s the basic rule of school finance equity. #txlege #txed 2/6
But what if a firm gets a 313 tax break, then kicks back part of its tax savings to the district? The district’s property tax revenue is unchanged, since it’s not taxing the project, so state aid (and revenue per student) is unchanged, and the district pockets the payment. 3/6
Read 6 tweets

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