Thread by @dlavine

@AustinISD is considering granting #Chapter313 tax breaks to @NXP for two new plants. Long thread follows. #txlege #txed 1/

The districts says this “would be considered a net benefit to Austin ISD, especially due to their 'Property Wealthy' status and their standing as the largest single-payer in the State's 'Recapture' system." bit.ly/3MDHuK9 #txlege #txed

AISD gets this wrong. 2/

The amount paid in recapture has NO EFFECT on net district revenue. It will get only its “entitlement,” which is based on attendance and student characteristics, regardless of amount of recapture. #txlege #txed 3/

Don’t forget: all recapture money is required by statute to be used by the state to aid other school districts. #txlege #txed 4/

TX Education Code Sec 49.154 (b) Receipts shall be deposited in the state treasury and may be used only for foundation school program purposes bit.ly/3wjKk12 #txlege #txed 5/

If NXP builds in Austin (where it already has two facilities) w/o a tax break, the property taxes it pays will be recaptured and spent by the state to help other school districts. #txlege 6/

If AISD gives NXP a #Chapter313 tax break, NXP saves tens of $millions a year and there is less recapture to distribute to other districts. AISD would still get only its entitlement under school finance formulas, for no net benefit. #txlege #txed 7/

Except that AISD could get $100 per student per year in kickbacks (“supplemental payments”) from NXP. So would AISD deprive other school districts of tens of $millions a year so it can get these small payments for itself? #txlege 8/

A separate thought experiment: What if all those downtown Austin towers were to suddenly disappear? AISD total property value would drop, as would its recapture payments. But AISD wouldn’t benefit, still getting only its entitlement under school-finance formulas. #txlege #txed 9/

Here’s a twist. If downtown disappeared, the rate of value growth in AISD would drop, so tax rate “compression” required by HB 3 would be less => homeowners and small business would pay more. #txlege #txed 10/

So if AISD gives NXP a #Chapter313 tax break, recapture would be less than if NXP came w/o a break => value growth would be less => tax compression would be less => homeowners would pay more. #txlege #txed 11/

So who wins under a #Chapter313? The company, a lot (huge cut in tax bill). The district, a bit ($100/student). Who loses? Other property owners (less tax compression). Other school districts (less recapture for distribution). #txlege #txed 12/