In Response to Texas IAF Campaign, Senate Includes Significant Reforms in Proposal for Corporate Subsidies
House Bill 5 heads back to Texas House for reconciliation.
We believe that a strong economic development strategy is the result of investments in education, workforce, and strong communities,
stated Edie Clark, a representative of [Central Texas] Interfaith, a nonpartisan organization of religious congregations, public schools and unions that advocates for families and is critical of school property tax incentives. "They voted to continue to support subsidizing corporate welfare on the backs of schoolchildren and taxpayers."
[Central Texas] Interfaith claimed its two-year campaign in opposition to the program helped eliminate direct payments to school districts and increased job creation requirements for Chapter 403
"These reforms were all meant to respond to our criticisms of the program," Clark said. "We commend the senators who had the courage to vote against this failed program. We look forward to seeing what the speaker and House think of this version of the bill."
Texas Lawmakers on Cusp of Reviving School Property Tax Breaks for Big, Expanding Businesses, Austin Business Journal [pdf]
Texas Senate Passes Bill Bringing Back Corporate Property Tax Breaks, Dallas Morning News
Statement on Texas Passage of HB 5, Central Texas Interfaith
CREATE 2-YEAR PAUSE TO ASSESS FISCAL IMPACT OF $31 BILLION IN CURRENT CHAPTER 313 TAXPAYER OBLIGATIONS
The Networks of Texas IAF Organizations (Texas IAF) urge Texas Senators to vote NO on HB5, the bill to renew the failed and defunct Chapter 313 program. With just a few days to go before the deadline for the Senate to pass House bills, the legislature has no clear path forward for the state’s costliest corporate tax incentive program, which was ended last legislative session with bi-partisan opposition. HB5 passed out of committee late Sunday with only 6 of 11 votes in favor.
“Though in the past few days there has finally been a real debate on the use of hard-earned taxpayer dollars on corporate giveaways, time has run out to put together an economic development program that protects schools and taxpayers,” said Rosalie Tristan, leader with Valley Interfaith of the Texas IAF. “Legislators and lobbyists had two years to put together a plan, and it’s clear that none exists because school-based corporate tax breaks are a failed strategy that undermines the future of our state.”
BANKRUPTS TAXPAYERS – HB5 would exponentially add to the already $31 Billion in over 900 taxpayer obligated Chapter 313 agreements. $20 BILLION OF THESE AGREEMENTS WERE SIGNED IN THE LAST 6 MONTHS OF 2022 ALONE!
EXPANDS FAILED CHAPTER 313 – Chapter 313 never funded EXPANSION OF EXISTING FACILITIES. HB5 would go beyond relocations and new plants, TO OBLIGATE TAXPAYERS TO POTENTIALLY FUND EXPANSION OF OVER 300 EXISTING OIL, GAS, AND MANUFACTURING PLANTS WITH EXISTING CHAPTER 313 AGREEMENTS!
CONTINUES “STACKING” OF TAX GIVEAWAYS – 72% OF MANUFACTURING PROJECTS (INCLUDING OIL AND GAS) THAT WERE GRANTED CHAPTER 313 AGREEMENTS IN 2022 WERE FOR PROJECTS THAT WON’T BE COMPLETED FOR 6 YEARS OR MORE, AND SOME FOR DECADES INTO THE FUTURE! HB5 Continues to allow companies to hook state taxpayers to pay for projects that start for years down the line, and for which the companies have no obligation to build.
SHIFTS BENEFITS PRIMARILY TO COASTAL PETROCHEMICAL INDUSTRY – While Chapter 313 at least had its benefits disbursed statewide somewhat across rural, suburban, and urban areas, the new qualifications under HB5 would essentially create a regional program where most qualifying projects would be in the petrochemical industry in the coastal region, but paid for by taxpayers ACROSS THE STATE.
“As several members of Senate Business and Commerce Committee pointed out, companies were well taken care of when existing Chapter 313 agreements nearly tripled to $31Billion in the last 6 months of 2022, often for projects decades into the future,” said Fr Miles Brandon of St. Julian of Norwich Episcopal Church in Williamson County. “That’s nearly a generation of tax giveaways. Taxpayers and lawmakers deserve a chance to catch their breath and create a more rational and fiscally prudent approach to economic development.”
*The Network of Texas IAF Organizations are non-partisans; institutionally based community organizations whose purpose is to train leaders to organize families around issues which affect their quality of life. The network includes Communities Organized for Public Service and The Metro Alliance and ICAN in San Antonio, The Border Organization, Valley Interfaith in the Rio Grande Valley; TMO in Houston; EPISO and Border Interfaith In El Paso; Austin Interfaith; ACT in Fort Worth; Dallas Area Interfaith; AMOS - Arlington, The West Texas Organizing Strategy; and Beaumont, Port Arthur and Orange.
Press Release [pdf]
Texas Industrial Areas Foundation Network Analysis of Chapter 313 [pdf]
Vote No on HB 5 [pdf]
Texas Industrial Areas Foundation Analysis of "Stacking" Permitted [pdf]
State Senate to Revamp Tax Break Program, Houston Chronicle [pdf]
Austin Interfaith, a longtime opponent of the program, shared its dismay with a message directed to House Speaker Dade Phelan and the representatives who voted in favor of the bill.
"You managed to bring back the failed and defunct Chapter 313 program and actually make it worse: worse for taxpayers, workers, schools, and the environment," stated Edie Clark, a leader with the organization. "It is now your corporate welfare bill as it heads to the Senate, which is now the only hope to protect Texas taxpayers. The Texas House of Representatives has officially become a fully functioning subsidiary of 'Texas Incorporated.'"
The organization commended local Reps. Gina Hinojosa, Carrie Isaac, Vikki Goodwin, Erin Zwiener, Ellen Troxclair and Lulu Flores for voting against the bill. "We need to protect our children and our schools," Flores said during a March rally in opposition to the bill. "We also need to make sure that we protect everyday working Texans. I'm here to fight for the rights of everyday people I'm proud to lend my hand and do any heavy lifting I need to do to make sure that working people are protected and supported."
[Photo Credit: Austin Business Journal]
Texas House OKs Revised Corporate Tax Breaks to Replace Chapter 313, Austin Business Journal [pdf]
CTI and Texas IAF Return to the Texas Capitol to Fight Big Industry's Efforts to Revive 'Vampire' Corporate Giveaway Bill
"HB5 takes the failed and destructive Chapter 313 corporate giveaway program and makes it worse: worse for taxpayers, worse for schools, worse for workers, and worse for the environment. It is shameful to think that the Legislature might pass an expansion of a failed and corrupt program that benefited multibillion-dollar multinational corporations to the tune of now $31 billion at the expense of Texas taxpayers and 95% of the students in the state. Rather than creating a real economic development strategy, industry lobbyists are taking crony capitalism to its greatest heights in the form of HB5. House Republicans and Democrats need to stop it in its tracks. Texas taxpayers and voters will be watching." - Jose Guerrero, CTI [Central Texas Interfaith] leader - Austin Business Journal
“As a result of this policy, taxpayers are on the hook for an estimated $31 billion, according to the comptroller. In a demonstration analysis of “winners and losers,” the Texas IAF took the $1billion a year that taxpayers spend on Chapter 313 agreements, and instead ran it through the per student funding formulas for each district in the state. We found that 95% of students in Texas are in districts that lose potential funding because corporations are not paying their fair share of taxes due to Chapter 313 agreements.” - Eloiso Davila, EPISO/Border Interfaith leader - El Paso Matters
New Texas Incentives Program Tweaked as It Advances at Capitol, Austin Business Journal [pdf]
Opinion: Texas Shouldn’t Bring Back this Corporate Welfare Vampire, El Paso Matters [pdf]
Labor allies, environmental groups and public policy nonprofits have joined the Texas IAF-led effort to oppose the renewal of Chapter 313. And this week, independent editorials opposing the bill have been published by the Houston Chronicle and Austin American Statesman.
[Photo Credit: Mark Mulligan, Houston Chronicle]
Coalition of Organizations Oppose HB 5 - Chapter 313 Renewal, Texas IAF [pdf]
Editorial: House Bill Rewards Companies at Expense of Our Schools, Austin American Statesman [pdf]
Editorial: Why Texas' New Chapter 313 Tax Break is Even Worse Than Before, Houston Chronicle [pdf]
House Proposal to Replace Chapter 313 Economic Incentive Program Excludes Clean Energy, Austin American Statesman [pdf]
Pros, Cons of Replacement for Chapter 313 Incentives Vigorously Debated at Texas Capitol, Austin Business Journal [pdf]
"In December, legislators killed a controversial tax abatement program known as Chapter 313, but its effects will last decades....
“There’s no accountability at the statewide level; nobody administers it,” said Bob Fleming, an organizer with [T]he Metropolitan Organization of Houston who campaigned against Chapter 313 reauthorization back in 2021. “A bunch of local school districts make singular decisions based on what they think is in their interest. Nobody is looking out for the statewide interest. Local school districts are overmatched when the $2,000 suits walk into the room.” ....
“It’s a perverse incentive,” said Doug Greco, lead organizer at Central Texas Interfaith, one of the organizations that helped shut down reauthorization of Chapter 313 in the 2021 legislative session.
“We approach it on a school funding basis,” said Greco, who is already gearing up to fight any Chapter 313 renewal efforts in 2023. “It’s corporate welfare and the people who pay over time are Texas school districts.” ....
As the December 31st expiration date for final certification of Chapter 313 tax break applications approaches, Central Texas Interfaith calls on the state comptroller's office to not rush into certifying the nearly 200 potential project applications still in the pipeline, including Samsung and NXP. The looming deadline does not give nearly enough time for school boards and community members to properly evaluate any more deals. It is time to turn the page.
[Excerpts from Austin Business Journal and Austin America Statesman]
"A vote has been delayed on whether to grant NXP Semiconductors NV property tax abatements that could aid its expansion of manufacturing facilities in Austin, edging the request very close to an end-of-year deadline...
The looming loss of the program has been lamented by many members of the business community, but because it limits public school property taxes, Chapter 313 has been opposed by some community organizations, including [Central Texas Interfaith, formerly known as] Austin Interfaith. 'While we want economic development and good jobs in Central Texas, Chapter 313 prohibits school boards from requiring high living wage and worker safety standards as part of these agreements, unlike city and county incentives in which good job standards can be negotiated,' Central Texas Interfaith and other progressive groups said in a Nov. 17 statement calling for AISD trustees to vote against the deal."
"With the expiration of Chapter 313 fast approaching, representatives of Central Texas Interfaith, an organization that has opposed the program because of its impact on statewide school funding, said the comptroller's office shouldn't be rushed into certifying the applications in the remaining backlog, 'given the billions of taxpayer dollars that are at stake.'
In addition, 'any application certified at this point (almost at Thanksgiving) does not give local taxpayers and school boards nearly enough time to properly deliberate and make decisions on these decades long obligations,' said the Rev. Miles Brandon, clergy leader with Central Texas Interfaith. 'It's time to turn the page on this failed program.'
Central Texas Interfaith and other critics of Chapter 313 have said the program has slipshod oversight and guidelines, calling it a mechanism for taxpayer-funded giveaways to corporations at the expense of statewide funding for education."
[Photo Credit: Arnold Wells, Austin Business Journal]
Decision on NXP's Chapter 313 incentives in Austin Coming Down to the Wire, Austin Business Journal [pdf]
As End of Texas Tax Break Looms, Fate Unclear for Billions in Potential Projects, Austin American Statesman [pdf]
“While we want economic development and good jobs in Central Texas, these agreements prohibit school boards from enacting high living wage and worker safety standards as part of these agreements, unlike city and county incentives, in which good job standards can be negotiated,” said Carlota Garcia of the Central Texas Interfaith organization.
Garcia said these agreements are “Texas’ largest corporate welfare program, which costs taxpayers over $1 billion annually—money that could be going to public schools and other public needs. The state must replace the revenue that the corporations get out of paying in property taxes for 10 years by collecting more taxes from all Texans.”
“We’re not anti-economic development,” said the Rev. Miles Brandon of St. Julian of Norwich Episcopal Church and member of Central Texas Interfaith. “We believe that all of the dollars we can possibly put together in this state should go to educate our children.”
-Austin Business Journal
“We are a part of the AISD community,” Brandon said. “We implore you to choose your advocates and partners over corporations. It makes certain there will be $100 million less to fight for. It is in our children’s best interest now and in the future.”
-Austin American Statesman
[Photo Credit: Community Impact]
Possible Chapter 313 Agreement Between Austin ISD, NXP Draws Criticism, Community Impact [pdf]
Austin ISD to Vote on NXP Semiconductor's $100M Tax Break, Austin Business Journal [pdf]
Time Ticking for Austin School Board to Vote on Proposed Tax Breaks for NXP Semiconductors, Austin American Statesman [pdf]
Reverend Minerva Camarena Skeith of St. John's Episcopal Church explains to Jon Stewart how Central Texas Interfaith/Texas IAF organizations fight corporate incentives that negatively impact public budgets, including schools.
“What’s happening right here, right now, very powerful.” -- Jon Stewart
In a Behind the Scenes Cut, Rev. Minerva Camarena-Skeith describes how communities can organize.
Full episode and panel discussion streaming on Apple TV+.