TX Lets Property Tax Exemption Die: Had Funneled $10 Billion Over Years To Oil, Chemical Companies
When organizers set out to overturn Texas’s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas — with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenge it for the first time.
At the beginning of last week, as Texas’s biennial legislative session approached its end, the aims of organizers remained modest. “We thought it would be a victory if the two-year reauthorization passed so we could organize in interim,” said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program. At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. “The bill never came up,” Greco told The Intercept. Organizers stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize.
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Texas’s Chapter 313 program allowed corporations building new facilities to apply to local school boards for a property tax waiver. The school boards hardly ever said no — likely because the local school district didn’t stand to lose money. Instead, the property tax money that was waived would have gone into a state fund, which should have especially benefitted overstretched urban school districts. An analysis by Central Texas Interfaith found these urban districts to be the biggest losers: Houston and Dallas school districts have each lost more than $20 million annually from the tax exemptions. Oil, gas, and petrochemical industries unambiguously won big. Two liquid natural gas companies, Corpus Christi Liquefaction, a subsidiary of Cheniere, and Freeport LNG topped the list with more than $55 million each in subsidies annually.
The subsidy program was designed to attract businesses that would not otherwise make their homes in Texas. In deciding approval for waivers, one prerequisite was that the subsidies be a determining factor in whether a company would build in-state. However, an analysis by the Houston Chronicle showed numerous examples of companies, such as the pipeline giant Energy Transfer, announcing a project before even applying for the waiver. And many of the subsidy recipients were doing Texas-specific projects — outgrowths of the state’s fracking boom in the Eagle Ford and Permian shale formations, using Gulf Coast export facilities — so they were unlikely to situate ventures elsewhere if subsidies did not come through.
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https://theintercept.com/2021/06/01/texas-subsidies-oil-companies/