Hot Take: Government Loves Picking Winners and Losers

For two decades, the Texas state legislature had a program in place that allowed school districts to hand out tax breaks to companies  — of their own choosing. Not all companies, mind you. Just some.

This program, previously known as Chapter 313, was used and abused by school districts and corporations alike — little restraint exhibited, taking advantage of all other taxpayers with abandon.

Over 1,000 of these Chapter 313 agreements were registered with the Texas Comptroller since 2002, each providing a decade-long abatement — a reduction in the taxed values of property — with upwards of 80 or 90 percent of school districts even waiving the minimal job requirements, resulting in many of these businesses creating only ONE job.

So here we had a program that allowed school districts to grant tax favors to certain businesses while many of these companies didn’t create more than one job. And yet, what have we, the taxpayers, been told for years by politicians that this  “economic development” — as they like to call it — would do for us personally?

We were told that the government must do this to create jobs! And we were told that the government must do this to keep our taxes low!

For one, the government doesn’t create jobs — the market does. Second, crony handouts to corporations do not reduce our personal property taxes – we can look over our past school district property tax bills for proof of that.

These claims by politicians and school districts are lies. Politicians love to tout these “talking points” to look like heroes to their voters. Stop falling for it.

When I was in the senate in 2017, I authored SB600, which would repeal Chapter 313. I was very proud that for the first time ever a bill to eliminate this corporate welfare scheme would be heard. Sadly, only a few other Republican legislators were with me on this. Trust me, most Democrat and Republican politicians LOVE to hand out corporate favors!

And even though the bill never got out of committee, that started something. Conversations regarding this unethical practice gained momentum, the GOP activists began pushing to rid our state of this egregious practice. FINALLY, last session, Chapter 313 got nixed because the legislature allowed the section of code that enabled it to expire — though it wouldn’t officially end until 2022.

Unsurprisingly, since they had only months left to get a last minute sweetheart deal, abatement applications from businesses FLOODED IN.

More than 450 were filed from June 2021 through 2022, almost 70 percent of which were wind and solar farms — the worst offenders of this abuse.

Because of this flood of applications, Comptroller Glenn Hegar turned away many applications due to insufficient time to process them before the program expired. A group of wind and solar farm projects sued Hegar, hoping the court would force him to process every application. The court denied that request but it shows just how addicted to these incentives corporations are, and they’re addicted, first and foremost, because the Legislature created this program in the first place.

Fast forward to today, and, disgustingly, the Texas Legislature, backed by Gov. Greg Abbott, is pining for a revival of the program! The whole gamut of business groups is pushing hard for it as well. And so of course, we now have House Bill 5 that recreates it — with some tweaks, and 37 House members have already signed on. Is one of those signers your representative?

According to The Texan reporting, this version excludes wind and solar companies but I don’t for one second believe there won’t be a significant effort to amend the bill during the session.

Even so, it’s a terrible, cronyistic program.

Why is the state allowing school districts to have this kind of authority anyway?

Picking and choosing economic winners and losers is not the business of any level of government, but it’s certainly not the business of school districts that have been the worst offenders of this sop given to businesses.

They abused it before. Why does the Legislature think they won’t abuse it again? Oh, and by the way, you small business owners who are the absolute backbone of our state and nation — any of you ever receive these tax abatements that these big corporations with their bevy of lobbyists receive?

I didn’t think so.

Infuriatingly, as legislators tout and push excellent legislation that cracks down on rogue local governments, they are rolling out a revival of a much-hated program previously rife with problems that gives other political subdivisions massive power and authority.

The hypocrisy is astounding! And it needs to stop.

If you’re as tired as I am of these backroom deals that give favors to some, while excluding others, I suggest you call your representatives. Otherwise, it’ll fly through the Legislature like a hot knife through butter.