The $9 Billion School Finance Problem in Speaker Bonnen's Backyard

[TexasTowelie]

While legislators focused on school finance and property taxes, a silent culprit continued to metastasize. If Chapter 313, a corporate welfare program, is left unaddressed, it could undermine any progress made this session, critics warn.


There’s a $9 billion (and growing) problem looming in the backyard of House Speaker Dennis Bonnen. That problem is formally known as Chapter 313.

As Texas’ largest corporate welfare program, it allows school districts to give big corporations steep discounts on property taxes for up to 13 years as a way to incentivize businesses to set up shop in the state. The forgone property tax revenue that districts would have used to fund their share of educating kids is covered by the state.

Such abatements have rapidly expanded in size and scope in recent years. By 2023, Chapter 313 — the program’s section in the state tax code — is projected by the state comptroller to cost Texas more than $1 billion a year in lost revenue. The more than 400 deals that are currently active are estimated to siphon $9.6 billion from state coffers over their lifespan. In effect, the state is spending more and more of the money meant for cash-strapped Texas schools on subsidizing industry.

At a time when lawmakers are scrambling to come up with the money to fund a major school-finance overhaul, Dick Lavine, the state’s foremost Chapter 313 critic, thinks it’s more important than ever to take a close look at the program, especially with its scheduled expiration date coming up in 2022. In short, Lavine thinks that ending or significantly curtailing the scope of the program is essential to any sort of long-term solution that increases the state’s diminishing share of education funding and reduces inequity between school districts.

Read more: https://www.texasobserver.org/the-9-billion-school-finance-problem-in-speaker-bonnens-backyard/