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:Read more
"The Austin ISD school board has voted against a multi-million dollar tax break for NXP, a semiconductor company...
"It is not fair that those who have the greatest ability to pay are the ones who don't want to pay a dime," Rev. Minerva Camarena Skeith of Central Texas Interfaith said.
The tax break called the appraised value limitation, or 313 agreement, lets potential businesses build property and create jobs in exchange for a 10-year limit on the taxable property value for school district maintenance and operation.
"We want more dollars for AISD and for every school district in this state. We want every child to have every opportunity they need," Rev. Miles Brandon with Central Texas Interfaith said."
NXP Fails to Gain School District Tax Incentives for Possible Factory Expansion, Austin Business Journal
With Weeks to Spare, Austin ISD to Vote on NXP Incentives, Austin Business Journal
Central Texas Interfaith Commends AISD Board for Rejecting Chapter 313 Deal with NXP, Central Texas Interfaith [pdf]
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]
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+.
The Chapter 313 program, authorized in 2001, allows Texas school districts to cap the taxable value of a property for some new projects, saving companies tens of millions of dollars in taxes, or more. It is set to expire at the end of December, after a bipartisan coalition in 2021 stopped efforts to reauthorize the program.
Critics of Chapter 313 call it corporate welfare that deprives Texas public schools of funding....
The Rev. Miles Brandon of St. Julian of Norwich Episcopal Church in Round Rock spoke in support of ending the program for good. He appeared on behalf of the Texas Industrial Areas Foundation and Austin Interfaith, both community... groups.
Clock is Ticking on Texas' Chapter 313 Incentives -- and Major Projects May Miss Out, Austin Business Journal [pdf]
Last summer, Central Texas Interfaith/Texas IAF leaders and nonprofit allies shut down Chapter 313 (a state tax exemption program giving away hundreds of millions of dollars per year to industrial and petrochemical companies). Since then, over 400 corporate applications flooded the system ahead of the program's expiration date at the end of this year -- more than twice as many than before. Central Texas Interfaith leaders took to every medium available to raise the alarm about the potential impact on school district budgets across the state.
[Excerpts from Austin American-Statesman]
"It's fiction," said Trenton Henrichson, a computer engineer and a leader of Central Texas Interfaith, a group that is opposed to the incentives. "If you're talking about (fabrication plants) 10 years in the future... you’re just making stuff up.”
....Leaders of Central Texas Interfaith called such applications "smoke and mirrors," saying the plans are fuzzy and local officials have no way to evaluate them. The organization helped lobby against renewal of the Chapter 313 program during last year's session of the state Legislature, saying the corporate tax breaks granted under it have decreased the amount of money available for public education in the state.
'Smoke and Mirrors' or Long-Range Planning? Possible Samsung Tax Breaks Stir Debate, Austin American-Statesman
What Could Epic Samsung Expansion Mean for Central Texas? Opportunities Savored, Concerns Raised, Austin Business Journal
CTI Leaders Take Hard Stand Against NXP's Corporate Welfare Request to AISD, Community Impact, CBS Austin, Austin Business Journal, Austin Chronicle, and Austin Independent School District
When NXP sprung a request for a Chapter 313 tax subsidy before the Austin Independent School District, Central Texas Interfaith leaders decided to descend upon a meeting of the Board of Trustees to ask them to reject the request. Chapter 313 tax subsidies are 10 year tax breaks to major gas, oil and manufacturing corporations that drain $1 Billion from state coffers on an annual basis. In response to a barrage of 20 CTI leaders testifying over the phone and in person against the tax giveaway, NXP (the company requesting the subsidy) changed the number of promised jobs on their application during the meeting from the statutory minimum of 25 to 500 overall.
The majority of community members who provided testimony on May 19 asked the board to vote against the Chapter 313 agreement with NXP. Many speakers were members of Central Texas Interfaith, a nonpartisan coalition of congregations, schools and unions that opposes Chapter 313.
“Hardworking taxpayers don’t get this kind of giveaway. Nor do small businesses, or responsible corporations,” said Central Texas Interfaith leader Trenton Henderson. “We want our money to go to public schools, but not to pay the bills for corporations shirking their responsibility to public education. Without a Chapter 313 agreement, NXP would have to pay their full share of school taxes.”
NXP Seeking Up To $140 Million in Tax Breaks for School Districts, Austin American Statesman [pdf]
Chapter 313 Incentives: What They Are and Why They're Suddenly the Talk of the Town, Austin Business Journal [pdf]
Statement on Austin ISD and Round Rock ISD Chapter 313 Votes, Central Texas Interfaith
Oped: Don't Ask Texas Schoolchildren to Fund Your Corporate Expansion, Austin Chronicle [pdf]
AISD Board Meeting Broadcast, Austin Independent School District [calls begin at -2:33:30, in-person testimony at -1:52:30]
While labor rights activists support Tesla’s stated commitment to a minimum wage of $15 an hour, substantially above Austin’s $7.25, the agreement sheds no light on which workers this standard applies to. The average hourly rate for manufacturing jobs in the U.S. is $22.
“The fear is that a company like Tesla keeps its high-level creative jobs in places like the Bay Area and begins to see Austin like a low-wage, high-tech town,”
said Doug Greco, lead organizer of Central Texas Interfaith, representing a coalition of nonprofit groups in Austin.
[Photo Credit: Cyber Truck: Tesla; Map: Lasagnaforone / Getty]
Amidst Deliberation Over $14.7M in Taxpayer Dollars to Tesla, Central TX Interfaith Calls for Living Wages
[Excerpts from Community Impact & Austin Monitor]
Travis County commissioners continue to consider a plan to offer electric automaker Tesla millions of dollars in economic incentives to build a factory in eastern Travis County, but with no date yet announced for a decision on the matter. If approved, Tesla could receive nearly $14.7 million in property tax rebates across 10 years with additional rebates in the 10 years following.
At the commissioners' June 30 meeting, Travis County community members again phoned in to voice support and concern regarding the proposed incentives. Several speakers encouraged the county to leverage for greater worker wage and protection commitments.
"We are skeptical. Numerous studies have shown that local governments rarely if ever receive benefits commensurate with what incentives cost, and, despite what they say, businesses rarely if ever give incentives much weight when deciding where to locate," said [Rev.] Michael
Floyd, who spoke on behalf of Central Texas Interfaith....
Floyd...pointed out that even at the average wage cited by Tesla, a family of three would still qualify for Travis County Rental Assistance. Currently, people earning 150 to 250 percent of the federal poverty income guidelines, or $31,580 to $54,300, qualify to receive rental assistance from the county due to an expansion in eligibility requirements resulting from Covid-19.
[Photo Credit: Courtesy Tesla via Community Impact]
County Development Incentive for Tesla Sees More Support, Austin Monitor [pdf]
Says David Guarino of All Saints Episcopal Church, “Austin Interfaith recognizes Mayor Steve Adler, City Manager Spencer Cronk and the members of the City Council for hearing and acting on our concerns.”
“Austin Interfaith is especially appreciative of Council Members Greg Casar and Sabino ‘Pio’ Renteria for co-sponsoring the amendment that guaranteed living wage requirements for firms receiving incentives.” Mayor Adler and Councilmembers Flanagan, Kitchen and Pool spoke in favor living wages as a key community value for Austin. Mayor ProTem Kathie Tovo and Council Member Pool thanked community leaders for working with the council and city staff on the new policy.
Austin Interfaith, an organization of 37 local congregations, schools, nonprofits and labor organizations, worked hard to ensure that the City Council required living wages for employees of firms receiving future tax incentives.
“Tonight, the Austin City Council has set a national standard for urban economic incentive programs by recognizing that people deserve the dignity of a living wage from employers who receive economic incentives,” Guarino.
Austin Interfaith has worked years to encourage the city toward the $15 an hour living wage standard for city-subsidized companies.
Said Reverend Sandy Jones from Mount Olive Baptist Church, “Austin Interfaith also applauds City Manager Cronk for recommending a $15 an hour living wage floor for city employees and contractors as part of the city’s budget process.”
Support Your Local and Small Businesses, Austin Chronicle