Corpus Christi, Texas — How are some of our industrial companies doing when it comes to taxes?
A study was released Tuesday, funded by the Coalition for the Coastal Conservation of the Environment (CAPE). It examines tax incentives granted to industrial corporations in Nueces and San Patricio counties. Tax benefits are provided by cities, counties and school districts.
“We’re living in what many of us call ‘Last Paradise in Texas.’ These are the incentives they need,” said CAPE’s Errol Summerlin.
Environmental groups want to know if the tax breaks given to steel and petrochemical companies are worth the work they have promised.
The study looked at 18 companies that CAPE believes have the greatest impact on public health and the environment.
The companies have paid about $580 million in taxes. Those companies received $2.47 billion in tax breaks, the study found.
The average tax cut cost for one of the jobs these companies promised was $953,294.
“When looking at the benefits, you have to consider the health impacts of these fossil fuel industries that have the greatest adverse impact on air and water quality,” Summerlin said.
The research was conducted by Canadian firm Autocase Economic Advisory. They looked at three tax cuts. The 18 companies received one to three such agreements.
A Chapter 312 agreement is a tax deduction for property taxes from the city or county to the corporation.
Chapter 313 agreements are property tax deductions from school districts to corporations. These agreements have a fixed term of up to 10 years.
Industrial Area Agreement (IDA) between the city and the company. Cities will agree not to incorporate a company into their cities, making them pay more in taxes, the deal said. Corpus Christi has 65 IDAs.
The 313 agreements accounted for 70% of the total tax relief.
Autocase said the 313 agreements had a greater negative impact on the state than on taxpayers.
“Because of the state aid and state funding of the 313 agreements, there is actually less money available for all regions,” said Stefan Dindayal, an Autocase employee who helped with the study.
The school district with the most tax relief is the Gregory-Portland Independent School District (GPISD), worth $1.3 billion. Equivalent to $243 per student in Texas public schools.
Ian Vasey of the Nueces County Development Board believes Coastal Bend has lost a lot of business due to incentives such as the 313 agreement.
He said he was personally committed to bringing Gulf Coast growth venture capital firms to the Coastal Bend and knew the tax benefits helped them decide Texas over Louisiana.
The study did not address the economic impact of owning these 18 companies.
Vassi said the 313 agreement was used because the Robinhood law caused the school district to lose taxes.
A 405, 313 agreement petition has been filed with the Texas Comptroller’s Office this year.
“The school district here can keep most of the revenue and not send it back to Austin,” he said. “And then, in turn, that revenue is sent to other parts of the state that don’t have to deal with growth. “
The 313 protocol didn’t start until 2002. With these tax agreements, companies will perform so-called PILOTS.
It’s not as much as a tax. But pilots paid to school districts are protected. Nine school districts in those two counties have not received any 313 agreements, Summerlin said.
Vasi believes the payments will be worth it in the long run.
“When you start getting an extra $100 million a year from these major industrial projects, you can do a lot of things. You can fix a lot of streets, you can hire a lot of police, that’s how high capital investment and big industrial projects are important. ,” Vassi said.
San Patricio and Nueces counties have 11 pending 313 agreements. Cheniere alone has 3 pending at GPISD.
Law 313 will expire at the end of this year.
But lawmakers may update it at the next legislative session. Hence why companies are now filing many such agreements, such as Tesla’s with the Robstown Independent School District.
Summerlin added that if lawmakers reinstate the 313 agreements, CAPE will continue to fight those agreements.
To view the entire study, you can click here.
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