Thread by @dlavine

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

The #Chapter313 program is so poorly regulated by lawmakers and the Comptroller that it routinely pays incentives to companies that need no inducement to move to Texas because they were already planning to build here and in some cases, have begun construction. #txlege #txed 4/21

Caterpillar, for example, applied for #Chapter313 tax breaks in August 2009 for a new plant in Seguin, telling the comptroller’s office it had “many attractive opportunities” and had considered locations outside Texas. #txlege #txed 5/21

In reality, Caterpillar officials had already hosted a groundbreaking ceremony in Seguin, seven months earlier, attended by Gov. Rick Perry himself.

#Chapter313 #txlege #txed 6/21

Some companies — say those building natural gas pipelines that reach the Gulf — can’t realistically move operations outside of TX, but they get the #Chapter313 subsidies anyway. So do companies that fail to deliver on the jobs or competitive pay they promised. #txlege 7/21

Yet, lawmakers have sanctioned the #Chapter313 shakedown for 20 years now, refusing to kill the program or even to sufficiently tighten standards and oversight.

houstonchronicle.com/opinion/editor…
#txlege #txed 8/21

By one measure, #Chapter313 costs more than $1.1 million in tax breaks per new job created.

And the more than 500 projects active as of early 2020 are expected to cost nearly $10.8 billion in tax breaks over the life span of each project. #txlege #txed 9/21

So, how has such a wasteful program as #Chapter313, seemingly rife with abuse, survived this long? To begin with, the standards for qualifying for the break are ridiculously loose. #txlege #txed 10/21

The Comoptroller need only determine if the tax break is a “determining factor” in a firm's decision to proceed with the #Chapter313 project. Even the comptroller has acknowledged on his website that the ultimate determining factors are “generally impossible to determine.” 11/21

Then there’s the fact that for some #txed school districts the #Chapter313 program can be a short-term bonanza, lending the program vocal support that can drown out the criticism. #txlege 12/21

State school finance formulas ensure that #txed districts aren’t hurt by the initial loss in property taxes, and they’re allowed to sweeten deals by negotiating extra payouts. #Chapter313 #txlege 13/21

Since those payouts don’t have to be shared with other districts, #Chapter313 deals benefit only about 5 percent of #txed K-12 students across the state, the Texas Tribune reported recently. #txlege #schoolfinance #equity 14/21

A loyal #Chapter313 supporter argues that “no one’s getting money from the state” because companies receiving the tax incentives get “simply a reduction of taxes for 10 years, and then it goes up to the full rate for the rest of the time.” #Txlege #txed 15/21

He’s wrong. If companies would have moved here anyway — evidence suggests many would have — then they’re getting #Chapter313 tax breaks that ordinary taxpayers, including homeowners, small business owners and renters, have to make up for with higher property taxes #txlege 16/21

The Chronicle investigation also found that #Chapter313 properties often depreciate in value, meaning the state misses out on a decade of the highest tax revenues.

houstonchronicle.com/news/investiga… #txlege #txed 17/21

"We say enough is enough for a parasitic program that has mooched off hard-working Texans for too long."

houstonchronicle.com/opinion/editor… #txlege #txed 18/21

Left to continue, the #Chapter313 program will only grow, as new applicants routinely argue they should benefit from the giveaway because their competitors already have.

houstonchronicle.com/opinion/editor… #txed 19/21

"#Chapter313 is nothing more than a series of sweetheart deals that enrich a few on the backs of many: homeowners and other taxpayers across Texas who can least afford it."

houstonchronicle.com/opinion/editor… #txlege #txed 20/21

"Lawmakers who truly want property tax relief and transparency should kill Chapter 313 and cut our losses: $10 billion and counting."

houstonchronicle.com/opinion/editor… #txlege #txed 21/21