Austin News

State Rep. Michele Beckley (D-Carrollton) said the extension by the Legislature on May 11 of the Texas Economic Development Act – giving large businesses a tax break on the value of their properties so they don’t have to contribute to schools – is wrong.

Called a “tax abatement,” the measure passed easily despite bipartisan opposition and was extended for two years. The results of the vote are recorded on capitol.texas.gov.

Funding for the measure however Buckley said is unlikely to pass the state Senate.

Beckley told the Austin News the idea the measure attracts business and thus jobs to the state of Texas is a myth.

“Texas legislators voted to extend the ability of school districts to offer property tax abatements, under the false impression that this bill actually drives business to the state,” she said. “Chapter 313 attempts to lure in corporations by letting them out of contributing what they owe to our schools, denying Texans the funding we need to provide higher education, health and social services, and public safety. Many Texas Legislators believe that Chapter 313 is necessary to attract companies, but the cost per jobs created by these giveaways is unreasonably high.”

Beckley said backers do not understand the end result of the bill.

“Revenue giveaways make it harder for Texans to have good jobs that support our families, a safe environment, and adequate public school funding,” she said.

Beckley said Texas and in particular the Dallas and Fort Worth area already have attractive enticements for business to locate in the state including reasonable land costs, right-to-work protection and no personal income tax.

“The DFW area also offers great public transportation, an opportunity-filled job market, and plenty of noteworthy restaurants, shops, parks, and more,” she said. “There is no need for Chapter 313, and many school districts suffer from its implementation.”

Beckley said only about 10% of Texas school districts benefit from the Economic Development Act, leaving the remainder needing funding to operate.

A report in the Texas Public Policy Foundation said giving a tax break to major corporations who don’t need it creates an un-level playing field for business. In addition a Texas Public Policy Foundation op-ed written by Stanley Greer said that while renewable energy businesses receive 57% of Chapter 313 abatements and 37% of the tax benefits, the measure only generates 8% in new (clean energy) job commitments and 27.6% in investments from wind and solar farms.   

Beckley agreed wind and solar power development is good. But she said removing taxes from funding public education inhibits development of a new generation of innovators (students) who could otherwise pioneer new technological research and development of clean energy.

She said a bill related to Economic Development Act fees, called HB 1556, will not pass the state Senate.

“The House postponed voting on HB 1556 until June 1, which essentially means that the bill is dead,” she said. “The 87th Texas Legislative regular session ends on May 31, 2021. The record vote for HB 4242, which relates to the extension of the expiration of certain parts of the Texas Economic Development Act, was on May 8 and was received from the House in the Senate on May 10. This bill has not yet been assigned to a Senate committee.”