Thread by @dlavine

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

Critics say that the #Chapter313 program amounts to a wasteful trough for costly corporate tax subsidies that starves the state of revenue that could be used to fund public schools, and the program will soon cost taxpayers more than $1 billion a year. #txlege #txed 4/9

We obtained data from all the #Chapter313 agreements active in 2019 that include estimates of each project’s cumulative investment and annual property value—including projections for how much a project will be worth when it returns to the rolls...#txlege #txed 5/9

Projects that are still years away from their #Chapter313 tax breaks ending—some as far out as 2035—tend to offer up rosy estimates of the value they will bring back to the rolls. The program’s track record makes those claims dubious, though. #txlege #txed 6/9

For example, data from the 200 active #Chapter313 manufacturing projects shows companies estimate that 50 percent of the projects’ total investment will return to the rolls, at an average of 70 percent of peak taxable value. #txlege #txed 7/9

Of those manufacturing projects—most of which are in the oil and gas or petrochemical sectors—16 have reached the end of their tax limitations. In the first year back on the tax rolls, those #Chapter313 projects were collectively worth $3.5 billion. #txlege #txed 8/9

That’s less than half of the $7 billion the #Chapter313 projects were worth at their peak and just 20 percent of the $18 billion in total investment.

texasobserver.org/texas-largest-… #txlege #txed 9/9