TEXANS ARE READY TO END CORPORATE PROPERTY TAX BREAKS

(Originally published in the Texas Business Daily - February 22, 2022.)

In a recent tweet following his speech to the Texas Oil and Gas Association, the speaker of the Texas House, Rep. Dade Phelan, indicated the Texas Legislature is “developing a program to replace Chapter 313,” the soon to be defunct provision in the Texas Tax Code that allows school districts to give property tax breaks to businesses.

The need for this stems from last year when Texans sent a clear message to members of the Legislature that it was wrong for Texas school districts to give multi-million property tax breaks to big business while average Texans’ property tax bills are skyrocketing.

For instance, the conservative Texas Public Policy Foundation partnered withthe progressive Every Texan in expressing grassroots’ opposition to “unjustified business tax breaks.” Their joint statement said, “It’s time to call these tax breaks what they are: handouts to favored industries and to the few school districts that use them to incentivize companies to locate there. Texans shouldn’t be on the hook for these sweetheart arrangements, and we certainly shouldn’t maintain them at the expense of our schools. Texas ought not to extend Chapter 313.” 

Even the Houston Chronicle joined the chorus against the program in an article titled, “Huge corporations are saving $10 billion on Texas taxes, and you're paying for it.”

Because of the outpouring of opposition, the Texas Legislature last year failed to pass any of a number of bills extending Chapter 313 past its scheduled expiration date of December 31, 2022. 

Now it appears that Phelan and other legislative leaders are listening to special interests rather than voters. However, they should not ignore their constituents who put them in office because opposition to Chapter 313-style tax breaks is alive and well across Texas. 

In January, the Stephenville ISD School Board voted to discontinue negotiations on 313 abatements for a proposed solar farm in Erath County. The 5-1 vote came after county residents had expressed their opposition to the abatements through public meetings, communications with school board trustees, and an active social media campaign.

One Erath County resident who fought against the abatements, Joanna Friebele, said, “I want everyone to remember this is America and we are all entitled to our opinions, we are entitled to work at it and if we do, sometime we get to reap the rewards.” She also reminded fellow activists of the ongoing efforts of businesses to get tax breaks, “This is also a multi million dollar corporation and they will work at it too.”

Robert Fleming led a number of Bell County residents in an effort successfully opposing abatements in Troy I.S.D. The school board voted down (6-1) the abatements for a proposed solar farm last June. He noted how difficult the fight is because of the resources the businesses bring to the fight, “These companies are very organized, they’re very professional. They come into our communities, they separate family, they separate friends, they separate neighbors with a dollar bill, and that is what really bothers me the most.”

This same battle has been fought–and often won–in other counties, including Montague, Brown, Wharton, Jackson, Clay, Val Verde, Concho, Van Zandt, and Coleman. 

One county where the battle is ongoing is Comanche County. Residents were caught off guard a number of years ago when a wind farm successfully campaigned for abatements. However, they were better prepared when a solar farm recently approached Comanche ISD seeking a 313 property tax abatement.

Over 60 residents showed up for a February community meeting. Topics discussed include the 313 approval process, environmental concerns related to solar farms, and the proposed boundaries of the “reinvestment zone,” which has to be adopted before the tax breaks can be offered. The meeting also included property owners who had signed leases with the solar farm. 

Comanche ISD will take the first step in the process at its February 28 school board meeting. Many county residents hope the board trustees will follow the lead of the trustees in Bandera ISD, which unanimously rejected a solar farm’s 313 application on February 14. 

Bandera and Comanche are not that far from Austin. Yet the message of residents in these and other counties does not seem to be reaching the Texas Capitol. Perhaps members of the Texas Legislature ought to spend more time back in their districts. If they did, they’d understand that Texans are tired of paying higher property taxes so that big business can get big tax breaks.

Bill Peacock is the policy director for the Energy Alliance.