Rep. Harvey Hilderbran, R-Kerrville (on left) (2005 AP Photo/Thomas Terry)
The Texas House on Friday tentatively approved a bill that would extend for another decade a program that lets school districts help their communities lure factories and high-paying jobs by granting property tax breaks.
The 12-year-old program has drawn fire, though, because it has cost the state an average of $350,000 per job created.
Through its main school funding formula, the state prevents school systems from losing any state aid because they?ve lowered property valuations to nudge businesses to locate manufacturing, research and development, or renewable energy facilities in the district.
The bill to extend the so-called ?Chapter 313? agreements through 2024 advanced on a 127-6 vote.
Opponents were mostly tea party-backed Republicans. But none spoke during the debate, which focused mainly on whether to restrict payments made to the school districts by some companies as a condition of their getting the lower valuations for purposes of school maintenance and operation taxes.
The House?s chief tax writer said the tax breaks have been indispensable to state efforts to recruit new businesses.
?It?s the most important economic development tool that we have,? House Ways and Means Committee Chairman Harvey Hilderbran, R-Kerrville, said of Chapter 313.
?Without it, we would not have attracted Toyota [and] Samsung,? he said, referring to plants that were brought to San Antonio and Austin and that make, respectively, pickup trucks and semiconductors. ?And we wouldn?t have attracted the many capital intensive projects we have in southeast Texas and in other places in the state.?
Hilderbran, the bill?s author, said it would make the program ?more accountable? by requiring the state to act as a gatekeeper vetting companies? applications and deciding who gets a waiver of job-creation requirements.
?That?s a very important reform,? he said.
But critics of the program such as tax policy analyst Dick Lavine of the center-left think tank the Center for Public Policy Priorities have said Hilderbran?s bill would keep a system that?s too loose about making sure as many jobs as possible are created. Merely transferring power to waive the job targets from districts to the state isn?t enough, he said. The waivers should be totally eliminated.
?Since just two projects ? Toyota in San Antonio and Caterpillar in Seguin ? are responsible for more than half of all the jobs created by the program, the cost to the state of the jobs created by all of the other projects is an astounding $700,000 per job,? Lavine said.
He also complained that more than one-third of the subsidies? $4.2 billion in costs to the state since 2001 have been for wind farms. But they?ve only created 9.5 percent of the jobs, he said.
House members, though, didn?t discuss job guarantees or whether renewable energy needs its own tax incentive program, as Lavine has urged.
They grew animated mostly over whether so-called ?supplemental payments? made by the companies to school districts should be narrowed, as urged by Rep. Jim Murphy, R-Houston.
An analysis by the comptroller?s office has said the payments, which can equal 40 percent to 50 percent of the school tax breaks, show that the reductions in property valuations may be ?higher than necessary? to attract the companies.
The House, though, tabled a tightening amendment by Murphy. It went on to adopt an amendment by Rep. Craig Eiland, D-Galveston, that rebuffed an attempt by Hilderbran?s bill to limit the duration of the supplemental payments.
The bill, which could clear the House as early as Saturday, would move next to the Senate. A similar bill in the Senate would extend the program?s life for six years, not 10 years.
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