Texas economic development evangelists speak of this program – once known as Chapter 313 but now House Bill 5 – with almost biblical reverence. It may not turn water into wine, but they argue it will at least turn our school property tax dollars into new jobs for years to come.
A surprising legislative success in 2021 is on track to be undone in 2023, unless a grass roots left-right coalition can block legislation and the forces behind it that are trying to go backward....
In the name of jobs and economic development, a 2012 tax code trick called Chapter 313 essentially funneled state money, via school district property tax breaks, to private companies doing new industrial construction. The school districts that granted tax breaks under Chapter 313 were reimbursed — and many still are being reimbursed — by the state, meaning we as taxpayers reimbursed them. It was the ultimate insider game of channeling public benefit to private companies.
The [Texas] Industrial Areas Foundation cleverly brought a man dressed as Dracula to its rally to dramatize how Chapter 313 unfairly drained school districts of funds and that reviving this bad economic development deal would be akin to raising the undead.Read more
“It’s like hogs at the trough,” said Bishop John Ogletree, an official with the faith-based Texas Industrial Areas Foundation, which has opposed the arrangements.Read more
Following an opposition campaign by Texas IAF organizations, Comptroller Glenn Hegar is backing away from his proposal to gut Chapter 313 reporting and accountability requirements in the program’s final year of existence. Hegar signaled the change Friday after significant pushback by Chapter 313 critics, including a press conference held by Texas IAF organizations in December, and a barrage of public comments submitted to his office against the proposal, with the largest portion coming from Texas IAF leaders.
During the 2021 Legislative Session, the Texas IAF, along with allies, stopped the reauthorization of Chapter 313, the State’s largest corporate tax subsidy program. Though the current program, which costs taxpayers $1-2 Billion per year, is set to expire in December of 2022, Comptroller Hegar had proposed in November to reduce the reporting requirements on jobs, wages, and overall costs to taxpayers.
“Comptroller Hegar has recognized the voices of voters from across the political spectrum, including our organizations, and now says the data we are concerned will continue to be available,” said Bob Fleming, a leader with The Metropolitan Organization, the IAF affiliate in Houston. “However, we remain vigilant because he says the rules will still be revised and made ‘more efficient’. Given the history of this failed and discontinued program, we need even more transparency and accountability, not less.”
[Photo Credit: Mark Mulligan, Houston Chronicle]
Network of Texas IAF Organizations, Press Release
Texas IAF Calls On State Comptroller to Abandon Plan to Gut Chapter 313 Subsidy Accountability Requirements
"Lawmakers have ordered Comptroller Glenn Hegar to wrap up Texas’s biggest corporate tax break program, but he wants to give companies one last gift: an end to public accountability.
Activists, corporate relocation specialists and lawmakers are scrambling to comment on Hegar’s proposal that companies no longer report key data about their progress toward meeting the terms of their property tax abatement agreements.
Interfaith groups that fought the corporate giveaway that hurts Texas children demanded Hegar roll back his plan on Wednesday.
“What is the benefit of less accountability and less transparency?” San Antonio state Senator José Menéndez asked at a Texas Industrial Areas Foundation press conference. “The taxpayer should know how their money is going to be used and what they are getting in exchange.”
[Photo Credit: Mark Mulligan, San Antonio Express News]
Texas Comptroller Proposes Covering Up Corporate Welfare Program, The Houston Chronicle [pdf]
Network of Texas IAF Organizations, along with Public Officials, Hold Press Conference to Call on Comptroller Hegar to Abandon Attempt to Gut Chapter 313 Transparency and Accountability, Texas IAF, Texas IAF
Taylor: The Chapter 313 Monster — the Mother of All Corporate Welfare — Revives?, San Antonio Express News [pdf]