Two Years of Texas IAF Opposition Leads to Reforms to Limit Giving School Money for Corporate Tax Breaks 

The Texas Senate and House passed a compromised version of HB5 that still fundamentally represents misguided economic development to the benefit of out of state corporations that would come here for other factors anyway.  This perpetuates a corporate welfare state which Chambers of Commerce and industry groups could never prove otherwise.

However, a 2-year campaign by Texas IAF and allies led to some major reforms in HB5 compared to the now defunct and failed Chapter 313 program.  When these tax abatement deals are proposed at local school districts, there will now be a fair fight for taxpayers and public school supporters concerned about corporate welfare.  HB 5 Reforms to Chapter 313 include:

House Bill 5 heads back to Texas House for reconciliation.

[Excerpt]

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

[Excerpt]

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]

[Excerpt]

"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]

[Excerpt]

More than 50 Central Texas Interfaith leaders joined nearly 200 clergy and leaders from across the Texas IAF network to participate in a statewide Legislative Advocacy Day on March 21. They addressed several issues important to them, but focused on one, opposing the reauthorization of the Chapter 313 “Vampire Fund” and what they termed any “school-based corporate tax giveaway program.”

[Excerpts]

“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.” 

-Community Impact

“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+.

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]

After Backlash, Texas Comptroller Abandons Plan to Hide Details of Controversial Tax Break Program, Houston Chronicle [pdf]

Network of Texas IAF Organizations, Press Release

[Excerpt]

"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.