In functioning democratic-capitalist societies it is typical for the government to refund citizens who overpay on their taxes. In Texas, hitherto the freest and most liberty-loving state in the Union, we seem to do the opposite.
This year the state will have received an unprecedented amount of taxpayer dollars. A $62 billion surplus, to be precise. But if you think a return check is coming in the mail, I have some bad news. Instead of broad tax relief, our representatives in Austin—and the sempiternal special interests that direct their votes—have elected to use the funds for corporate welfare. Similar to the ills of the much-touted homestead exemption, corporate welfare will only benefit a small number of Texans.
These benefits, to be clear, are based on outright theft. Politically connected companies reap rewards while—and here is the kicker—property taxes are raised to keep this cycle of griftspinning. In order to bust up this corrupt bargain, it is important to understand how the scheme operates.
The current racket started in 2021 when, under significant political pressure from the left and the right, the Texas Legislature let expire the Chapter 313 “economic development” program that allows Texas school districts to offer property tax abatements to politically connected businesses. The program did little for expanding economic development. Instead, it filled school district coffers at the expense of taxpayers across the state while littering Texas counties with wind and solar farms.
Now, however, big business interests have joined with a number of Texas politicians this session to file three bills to bring the program back to life, despite the evidence of the harm it has caused. Any iteration of the defunct Chapter 313 program would benefit only big business, school districts, and politicians. Taxpayers will not see lower property taxes, employees will not see more jobs, and the economy will not experience more growth.
Needless to say, the Texas Legislature should not renew school property tax abatements. So, it is curious that Gov. Abbott and Texas House Speaker Dade Phelan have been the most vocal proponents of resurrecting some version of Chapter 313.
The push for giving tax breaks to large businesses comes as Abbott, Phelan, and Texas Lt. Gov. Dan Patrick are struggling to gain credibility with taxpayers frustrated about rising property taxes and the Legislature’s unwillingness to meaningfully reduce them. This makes their political initiative all the more curious: Why refuse to use a meaningful part of the budget surplus for property tax relief, but feel no compunction on spending it on corporate interests?
At the moment, lobbyists are lining Capitol hallways pressing members to support the renewal of Chapter 313 or something similar. It is clear that while property tax abatements do not benefit most Texans, they do provide full employment for lobbyists and consultants.
The best—and longest lasting—economic incentive we can provide businesses (or anyone) is lower property taxes across the board. Texans deserve definitive action that permanently locks in property tax relief and puts Texas on the path to eliminate school M&O property taxes.
Short of this, the cycle of backroom dealing and division of Texans into special interest groups played like pawns on a board, will continue.
Don Huffines is a former State Senator, self-made businessman, and proud fifth-generation Texan. You can keep up with his work advancing liberty, prosperity, and virtue at HuffinesLiberty.com and follow him @DonHuffines on Twitter and other social media. Huffines’ column, Liberty Report, runs weekly in The Dallas Express.
