As Texas' $10 Billion Corporate Tax Break Program Closes, State Comptroller Wants To Cover Up Costs

Texas Comptroller Glenn Hegar is pursuing new rules that opponents warn would weaken transparency and accountability for the state’s biggest corporate tax break program, Chapter 313, just as it is set to expire at the end of 2022. The comptroller’s proposals, which were published last Friday, would effectively cover the program in a cloak of opacity, obscuring the billions of dollars that the state will still be on the hook for even after the program shuts its doors. Hundreds of these lucrative school property tax deals are still in their early years—or still awaiting approval—and will remain active for decades to come, as far out as 2049.

The hulking property tax abatement program met its unexpected demise this year when state lawmakers chose not to renew it. For years, Chapter 313 has allowed local school districts to grant corporations steep discounts on property tax bills for 10 years in exchange for building large-scale projects. The program was a coup for major manufacturing firms, oil and gas giants, and other large corporations that have saved billions of dollars on school property taxes since the Chapter 313’s inception 20 years ago. 

But support for the once-popular program flagged amid concerns about its rapidly ballooning size, at last count, of 600 active projects and an estimated total lifetime cost of roughly $11 billion in foregone tax revenue. Chapter 313 also drew scrutiny over its biggest selling points: that these projects—which technically would only happen because of these deals—create lots of high-paying quality jobs and that the value these facilities bring to school tax rolls over the long-term easily outweigh the cost of a decades worth of tax breaks.

The data and reports that the comptroller is proposing to get rid of or make less accessible have allowed for several exposés uncovering the program’s many flaws. A recent Texas Observer investigation into the Chapter 313 deals that have now come to an end found that companies often drastically overestimated how much value the projects will bring back to the tax rolls. A Houston Chronicle investigation also found that corporations routinely failed to create the required job and wage requirements once they secured the tax incentives.