There is a $10 Billion corporate tax break bill in the Legislature that is so bad that both the progressive Every Texan and the conservative Texas Public Policy Foundation are vigorously opposing it. Read more below.

Also this Saturday, at 4 pm, HISD Board President Allen will be speaking to CVPE about board priorities, the superintendent search and what is happening in the Legislature. Click on the link to RSVP -  https://www.houstoncvpe.org/cvpe_meeting_with_hisd_pres_allen

Here are some recent articles from the Houston Chronicle series on the giant corporate tax break:

Imagine how much better we could support Texas schoolchildren if corporations paid their fair share. It will be heard in the Senate Committee this week.

Can you call/email members of the Senate Committee on Natural Resources & Economic Development and tell them enough is enough? Click below for their emails and phone numbers. Sen. Brian Birdwell (chair), Sen. Judith Zaffirini (v chair), Sen. Carol AlvaradoSen. Kelly HancockSen. Juan HinojosaSen. Bryan HughesSen. Lois  KolkhorstSen. Eddie Lucio, Jr. ,Sen. Kel Seliger

Below is the full text of the May 14th Texas property tax breaks for business are only the tip of a troubling iceberg

Editorial: How a $10 billion corporate tax break is breaking Texas taxpayers.

May 17, 2021Updated: May 17, 2021 3 a.m.

There are few things that unite Texans more than our disdain for property taxes.

Politicians know this and exploit our hatred regularly for their own partisan gain, with some playing the role of warriors beating back the daunting foe. Last session, Republican leaders declared school finance reform the answer. This session, Sen. Paul Bettencourt crowed in a recent press release about advancing legislation to create statewide portal where Texans can more easily view proposed tax rates.

“Taxpayers demand and need transparency in the entire property tax process!” Bettencourt shouted in bold type.

We agree, so much that we think all lawmakers — Republicans and Democrats — should be transparent about the real reasons our property taxes are so high. It’s not only our soaring property values or Texas’ lack of income tax.

It’s also that ordinary Texans are regularly expected to bear the burden of billions of dollars in corporate welfare to some of America’s wealthiest companies under the false premise that we’re all benefiting somehow.

While the arrangement is sold as a way to lure new business to Texas and create well-paying jobs, a Chronicle investigation, Unfair Burden, reveals how the state’s biggest tax incentive program is a wasteful boondoggle.

The “Chapter 313” program, named for the section of the Texas Tax Code that enables it, lets companies keep a portion of their property values off of school district tax rolls for a decade.

The program is so poorly regulated by lawmakers and Texas Comptroller Glenn Hegar that it routinely pays incentives to companies that need no inducement to move to Texas because they were already planning to build here and in some cases, have begun construction.

Caterpillar, for example, applied for tax breaks in August 2009 for a new plant in Seguin, telling the comptroller’s office it had “many attractive opportunities” and had considered locations outside Texas. In reality, Caterpillar officials had already hosted a groundbreaking ceremony in Seguin, seven months earlier, attended by Gov. Rick Perry himself.

Some companies — say those building natural gas pipelines that reach the Gulf — can’t realistically move operations outside of Texas, but they get the subsidies anyway. So do companies that fail to deliver on the number of jobs or competitive pay they promised to bring to Texas.

Yet, lawmakers have sanctioned the Chapter 313 shakedown for 20 years now, refusing to kill the program or even to sufficiently tighten standards and oversight.

Imagine how absurd it would have been if the Cleveland Browns had paid Johnny Manziel a big signing bonus after he’d already signed, and then kept paying him bonuses for years after they realized he’d never be the player they had hoped he’d be. Then imagine the team doing it again with another player. And again. And again. For two decades.

Except of course Chapter 313 is worse. It isn’t just a rich team owner losing money. It’s Texas taxpayers, many of whom have enjoyed no breaks on their own soaring property tax bills despite losing work during the pandemic.

How much has Texas lost? By one measure, Chapter 313 costs more than $1.1 million in tax breaks per new job created, according to state data the Chronicle analyzed. And the more than 500 projects active as of early 2020 are expected to cost nearly $10.8 billion in tax breaks over the life span of each project.

So, how has such a wasteful program, seemingly rife with abuse, survived this long?

To begin with, the standards for qualifying for the break are ridiculously loose.

Hegar’s office need only determine if the tax break is a “determining factor” in a company’s decision to proceed with the project. Even the comptroller’s office has acknowledged on its website that the ultimate determining factors are “generally impossible to determine.” So, how does he decide? Assumption.

Then there’s the fact that for some school districts the 313 program can be a short-term bonanza, lending the program vocal support that can drown out the criticism. State school finance formulas ensure that the districts aren’t hurt by the initial loss in property taxes, and they’re allowed to sweeten deals by negotiating extra payouts.

Since those payouts don’t have to be shared with other districts, Chapter 313 deals benefit only about 5 percent of K-12 students across the state, the Texas Tribune reported recently.

A loyal 313 supporter, Houston Republican state Rep. Jim Murphy argues that “no one’s getting money from the state” because companies receiving the tax incentives get “simply a reduction of taxes for 10 years, and then it goes up to the full rate for the rest of the time.”

He’s wrong. If the companies would have moved here anyway — and the evidence suggests many would have — then, yes, they’re getting tax breaks that ordinary taxpayers, including homeowners, small business owners and renters, have to make up for with higher property taxes to fund schools and other state needs. The Chronicle investigation also found that Chapter 313 properties often depreciate in value, meaning the state misses out on a decade of the highest tax revenues.

Lawmakers have proposed tweaks that supposedly address opponents’ concerns. But, as in sessions past, the changes only worsen problems or create other ones.

Murphy had authored a bill to prohibit districts from negotiating with companies and cap the extra payments they can receive, but the bill also allows tax breaks for renovations and removes the modest requirement that companies create 10-25 jobs.

Another bill offers a compromise: renewing Chapter 313, as is, for a couple more years, during which time lawmakers could study whether to change or end it next session.

We say enough is enough for a parasitic program that has mooched off hard-working Texans for too long. Left to continue, the program will only grow, as new applicants routinely argue they should benefit from the giveaway because their competitors already have.

Chapter 313 is nothing more than a series of sweetheart deals that enrich a few on the backs of many: homeowners and other taxpayers across Texas who can least afford it. Lawmakers who truly want property tax relief and transparency should kill Chapter 313 and cut our losses: $10 billion and counting.

HoustonCVPE

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