What can be done?

The joint cooperation of governing institutions with private enterprise has been a part of our country’s economic engine from the Erie Canal, to the building the railroads and even the Houston Ship Channel. But to rely on tax abatements from local school districts to achieve such economic development is completely counterproductive to the very reason to have the economic development in the first place.

Chapter 313 since it is only in the property tax code for school districts, should be repealed. Texas State Senator Konni Burton bravely introduced just such legislation in the last (85th) legislative session. It did not make it to Governor Abbott to be signed into law so it is an opportunity to get something ready for the 86th Legislature.

If Chapter 313 cannot be repealed and the state of Texas insists that our schools subjugate their primary role of education to subsidize economic development than the burden of subsidizing school property taxes should be placed on the locality which will more directly benefit from the abatement. A higher level of oversight and accountability from the State to assure that the effort will truly be a benefit statewide and the result of the abatement will provide some relief to the established taxpayer base already residing in the district.

  1. Local Participation in the reimbursement – As the local community stands to get the most direct and greatest economic benefit from the granting of these abatements, the local county and city should be willing to participate equally with the state in reimbursing the school district. In situations where districts cross county lines or city limits, an apportionment of the local participation can be derived. Such apportionment can be structured locally as the State of Texas will only be contributing half to the district. The school districts and governing bodies can develop the allocation of their portion
  2. Higher Levels of Oversight – As it is currently, the state comptroller is mandated to reimburse the school district. Other than verifying compliance with the guidelines set forth in the law, no state agency has oversight to insure the economic benefits are truly statewide. If funds are to come from the Texas State Treasury, it is the state’s fiduciary responsibility that all Texans will derive some benefit.
  3. Sharing the return with the State – As the school district can still receive tax payments in the form of PiLOTS (Payment in Lieu of Taxes) an equal share of these payments should be remitted back to the state’s general fund or a special fund for other school districts to bring some level of equitable school funding across the state. If the state is to share in the investment, it should be able to share in the return on that investment.

Share your comments of suggestions at chapter313@reagan.com


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