Two Years of Texas IAF Opposition Leads to Reforms to Limit Giving School Money for Corporate Tax Breaks 

The Texas Senate and House passed a compromised version of HB5 that still fundamentally represents misguided economic development to the benefit of out of state corporations that would come here for other factors anyway.  This perpetuates a corporate welfare state which Chambers of Commerce and industry groups could never prove otherwise.

However, a 2-year campaign by Texas IAF and allies led to some major reforms in HB5 compared to the now defunct and failed Chapter 313 program.  When these tax abatement deals are proposed at local school districts, there will now be a fair fight for taxpayers and public school supporters concerned about corporate welfare.  HB 5 Reforms to Chapter 313 include:

[Excerpt]

Chapter 313 was one of the country’s worst examples of crony capitalism, funneling billions in Texas taxpayer dollars to out-of-state interests. The program still costs Texas taxpayers over $1 billion a year in tax breaks to major oil, gas and manufacturing companies — money that could go to educating our children.

Dallas Area Interfaith, the Texas IAF, allies and a bipartisan group of legislators killed the reauthorization of Chapter 313 in the 2021 legislative session. Rather than leaving the program in the grave, industry groups are actually proposing to resurrect Chapter 313 this legislative session and make it worse in the form of House Bill 5.

Last September, in a House Ways and Means Committee hearing, industry groups painted an apocalyptic vision of Texas’ economy without Chapter 313. Their statements were based on opinion. Fortunately, we can look to Louisiana to see if their fears are merited.

In 2016, Louisiana reformed its version of Chapter 313, the Industrial Tax Exemption Program. The reforms generated $760 million in new tax revenue for schools and other public entities with no negative impacts on jobs. In fact, capital expenditures grew after the reforms.

Louisiana’s experience mirrors studies on economic development incentives. The Upjohn Institute found that “75% to 98% of the time, the same decision would have been made without the incentive.”

Similarly, a 2017 University of Texas study of Chapter 313 estimated that between 85% and 95% of Chapter 313 projects would have been located in Texas without the incentive. These incentives matter much less than other factors such as the labor force, education, infrastructure and access to markets and materials.

[Image Credit: NewsArt.com/Chris Van Es]

Paying for the 'Texas Miracle', Dallas Morning News [pdf]

Texas House Passes Plan to Bring Back Corporate Property Tax Breaks for Major Projects, Dallas Morning News [pdf]

Less than a day after a bill that would raise the age to legally purchase semi-automatic rifles unexpectedly passed through Committee, Texas IAF leaders learned that Representative Guillen (from Rio Grande City) appeared to be actively suppressing House Bill 2744 from being heard on the floor.  Delayed submission of the Committee report resulted in the bill missing a crucial deadline for it to put on the Calendars schedule for Thursday -- the last day to hear new bills. 

Leaders from across the state held an emergency press conference calling on Guillen and the Texas House Speaker to allow the bill to be heard, and for Calendars.    

“Guillen and Burrows should...let the representatives vote their conscience on the House floor. Overwhelmingly, Texans support increasing the age limit of when people can buy assault weapons,” Rev. Minerva Camarena-Skeith from Central Texas Interfaith asserted. 

“We’re very, very angry at what’s going on, with them holding this bill hostage,” Valley Interfaith leader Rosalie Tristan of Raymondville told the Rio Grande Guardian. 

“We know that there’s five hours left to go before this bill — which is a small step but it is a beginning of a good step — will die,” said Sonia Rodriguez of COPS/Metro Alliance. “Something has to be done and it has to be done now.”

After the deadline was missed, COPS/Metro leaders announced "it's not too late for Speaker Phelan to bring it to the floor for debate and vote." 

"How many more children have to die before we act?" demanded TMO leader Bishop John Ogletree. 

[Photo Credit: Blaine Young, Texas Tribune]

'Raise-the-Age' Gun Bill Misses Crucial Deadline, Texas Tribune [pdf]

Valley Interfaith: Guillen is 'Actively Suppressing' Assault Rifle Age Bill from Reaching House Floor, Rio Grande Guardian [pdf]

Raise the Age Gun Bill in Peril as Texas House Deadline Looms, KXAN [pdf]

Lubbock and Valley Legislators Block Assault Rifle Age Limit Bill, HB 2744, from Reaching the Floor of Texas House, Texas IAF [pdf]

[Excerpt]

"In December, legislators killed a controversial tax abatement program known as Chapter 313, but its effects will last decades....

“There’s no accountability at the statewide level; nobody administers it,” said Bob Fleming, an organizer with [T]he Metropolitan Organization of Houston who campaigned against Chapter 313 reauthorization back in 2021. “A bunch of local school districts make singular decisions based on what they think is in their interest. Nobody is looking out for the statewide interest. Local school districts are overmatched when the $2,000 suits walk into the room.” ....

“It’s a perverse incentive,” said Doug Greco, lead organizer at Central Texas Interfaith, one of the organizations that helped shut down reauthorization of Chapter 313 in the 2021 legislative session.

“We approach it on a school funding basis,” said Greco, who is already gearing up to fight any Chapter 313 renewal efforts in 2023. “It’s corporate welfare and the people who pay over time are Texas school districts.” ....

“The district my granddaughter goes to is losing $4 million to $5 million every year,” said Rosalie Tristan, referring to Edinburg Consolidated Independent School District. Tristan is an organizer with the community organization Valley Interfaith who lives north of McAllen in the Rio Grande Valley.

“They could be using that money to get more teachers for these students,” she said. “For a parent, or for a grandparent raising her granddaughter, it’s a hit in the gut.”

[Photo Credit: Pu Ying Huang, The Texas Tribune]

Critics Say State Tax Break Helps Petrochemical Companies and Hurts Public Schools, The Texas Tribune [pdf]

[Excerpts]

Members of Dallas Area Interfaith – which was among the groups that pushed the Legislature to end the controversial Chapter 313 program – cheered at the news. The group mobilized to urge DISD trustees to veto the proposal.

“Does it make sense to continue to grant certain large corporations these huge tax breaks?” DAI leader Bill deHaas said ahead of the meeting. “We already know that we have a crunch on educational spending.”

In a letter to trustees, members of the group argued that the process was rushed to meet the Dec. 31 deadline, keeping the district from doing due diligence.

“At its core, Chapter 313 is inequitable for Texas children....”

Should the DISD deal have gone through, Hanwha would have given the district about $300,000 each year for the next decade for its general fund, said Dwayne Thompson, deputy superintendent of business services.

After the DISD meeting, Dallas Area Interfaith members said they would continue the fight in Austin.

Dallas ISD Punts Tax Break Ask from Manufacturing Company Ahead of Chapter 313 Expiration, Dallas Morning News [pdf]

Dallas Area Interfaith Commends DISD Board for Rejecting Chapter 313 Deal with Hanwha Q Cells, Dallas Area Interfaith

DAI Calls on DISD Trustees to Vote Against Hanwha Ch. 313 Application, Dallas Area Interfaith

"Dallas Area Interfaith and its related organizations in the Texas Industrial Areas Foundation helped lead the fight to end Chapter 313 in the Texas legislature last year. The group is also opposing new applications at the school board level, a job that’s picking up as applications pour in this summer.

“Typically, we would find about 5% of the school districts would have tax abatements through 313, and it would come to an average of roughly 100 a year,” Dallas Area Interfaith Leader Bill deHaas said. “We’re on the way to tripling that.”

The bipartisan group opposes new agreements on the basis that they hurt Texas schools and students.

“Dallas ISD, on average is losing about $20 million a year because of the tax abatements. They go to only 5% of the state school districts,” deHaas said.

DeHaas’ point is that the vast majority of Texas school districts would receive more funding per student if the state eliminated costs that go to cover 313 agreements.

Since the comptroller frequently waives a job creation requirement, deHaas also said the tax breaks don’t create many local jobs. At the end of 2021, the comptroller recorded more than 9,000 jobs created by $217 billion in investments.

“It just seems to us to be an unfair system to attract new corporations to the state of Texas, and what happens is it penalizes 95% of the students in the state,” he said."

Companies Lining Up for Future Tax Breaks as Texas Incentive Program Nears End, Dallas Morning News [pdf]

[Excerpts]

When organizers set out to overturn Texas’s giveaway program for the oil and gas industry, they had a long game in mind. Over 20 years, the tax exemption program known as Chapter 313 had delivered $10 billion in tax cuts to corporations operating in Texas — with petrochemical firms being the biggest winners. This year, for the first time in a decade, the program was up for reauthorization. Organizers decided to challenge it for the first time.

At the beginning of last week, as Texas’s biennial legislative session approached its end, the aims of organizers remained modest. “We thought it would be a victory if the two-year reauthorization passed so we could organize in interim,” said Doug Greco, the lead organizer for Central Texas Interfaith, one of the organizations fighting to end the subsidy program.

At 4 a.m. last Thursday, it became clear that something unexpected was happening: The deadline for reauthorization passed. “The bill never came up,” Greco told The Intercept. Organizers stayed vigilant until the legislative session officially closed on Monday at midnight, but the reauthorization did not materialize....

“No one had really questioned this program,” said Greco, of Central Texas Interfaith. The reauthorization was a once-in-a-decade chance to challenge it. “We knew in our guts that the program was just a blank check, but we also are very sober about the realities of the Texas legislature.”

In Blow to Big Oil, Corporate Subsidy Quietly Dies in Texas, The Intercept [pdf]

How Skeptical Texas Lawmakers Put an End to a Controversial Tax Incentive Program, Houston Chronicle [pdf]

Texas Legislature Dooms Chapter 331, Which Gives Tax Breaks to Big Businesses, Business Journal [pdf]

Missed Deadline Could Doom Controversial $10B Tax-Break Program, Houston Chronicle [pdf]

A Texas Law Offers Tax Breaks to Companies, but It's Renewal Isn't a Done Deal, Texas Tribune [pdf]

Losers and Winners from Chapter 313, Central Texas Interfaith

[Excerpts]

A new Senate committee, quietly formed Friday and stacked with Republicans who favor permitless carry, will have a hearing on the proposal next week, according to its new chairman... Since then, several Republican senators publicly announced support for “constitutional carry,” as it is known among backers, who say the government shouldn’t block people’s right to bear arms....

Meanwhile, lobbying is intensifying against the bill as faith leaders this week joined a growing list of opponents, which already includes members of law enforcement and some firearm instructors.

“With every right we have comes corresponding responsibilities and the background checks and the safety measures help with that,” said Bishop Gregory Kelly of the Catholic Diocese of Dallas, one of several faith leaders to speak at a press conference Wednesday sponsored by the Network of Texas IAF Organizations.

“My dad was a gun owner, he taught me how to shoot a gun when I was a kid ... I don’t see how not having that in place makes us safer.”

[Photo Credit: John Figueroa, Dallas Morning News]

Texas 'Constitutional Carry' Proposal For Handguns Has New Momentum in State Senate, Dallas Morning News [pdf]

Bishops, rabbis, clergy and faithful from across Texas convened to express vocal opposition to the passage of proposed legislation HB1927 which would allow "permitless carry" in the state of Texas.

Catholic Bishop Mark Seitz referenced the massacre in El Paso which resulted in dozens of residents dead and seriously injured. Baptist Rev. Darryl Crooms from San Antonio testified to the "unnaturalness" of adults burying children.  Lutheran Rev. Jessica Cain testified to the impact of last weekend's shooting in North Austin on local worshippers.  Rabbi David Lyon recalled last year's deadly shooting in Santa Fe High School.

Together -- with Lutheran Bishop Erik Gronberg, Episcopal Bishop Suffragan Kathryn Ryan, Methodist Director of Missional Outreach Andy Lewis, Dallas Catholic Bishop Gregory Kelly and several lay leaders -- all expressed concern that passage of HB1927 would increase gun violence.  States that have passed similar laws, removing the required license and training needed to carry a handgun, experienced spikes in homicides and gun violence.

“Our faith tradition teaches us to protect life,” said Bishop Suffragan Kathryn M. Ryan of the Episcopal Diocese of Texas. “You cannot protect life if people carrying deadly weapons aren’t properly trained and licensed.

"You’ll find no scripture that will support this kind of legislation,” said Pastor John Ogletree, First Metropolitan Church of Houston. 

“It makes our church much less safe,” said El Paso Bishop Mark Seitz.

Video of Press Conference

Group of Texas State Leaders Say They're Opposed to Permitless Carry, FOX KDFW

Esto Opinan Líderes Religiosos en Tejas Sobre la Propuesta Legislativa de Portar Armas Sin Licencia, Univision Dallas 

Texas Faith Leaders Come Out Against 'Permitless Carry',  CBS Austin [pdf]

Bishop Mark J. Seitz, Other Religious Leaders Oppose Bill That Would Ease Carrying of Guns, El Paso Times [pdf]

Religious Leaders Speak Against Texas Bill That Could Allow You to Carry Gun Without License, ABC13 Houston [pdf]

El Paso Bishop, Gun Store Weigh In On Texas 'Constitutional Carry' Bill Debate, KFOX14 [pdf]

[Excerpts]

Three groups funded by the Catholic Campaign for Human Development (CCHD) strengthened their networks during the pandemic and developed innovative strategies that will likely persist after the virus is controlled....

“The pandemic has lifted a veil,” Josephine [Lopez-Paul] says. “The number of people who are living in poverty” is in our face, she says.

 “The need is there. You can’t ignore it. Poverty is not a secret in our city anymore.”

She adds, “DAI’s approach is still rooted in relationship, and that hasn’t changed. Clergy and leaders have been there for one another as part of a community.”

DAI is an affiliate of the West/Southwest Industrial Areas Foundation (IAF). It has 33 congregational members with approximately 300 active leaders. DAI conducts weekly virtual meetings for clergy to share concerns and potential solutions. At one meeting early in the crisis, a pastor reported that half of 30 participants contracted COVID-19 after an unmasked choir practice.   In response, celebrants of the weekly televised Mass from the diocesan cathedral began to use the final minute of the broadcast to urge compliance with masking and socialdistancing recommendations.

Like others, DAI has moved many activities, such as organizing and training programs, online. Josephine says this will continue beyond the pandemic, so that “imagination and vision” can be shared with isolated participants in rural areas, as well as with those who can attend in person.

[In photo: DAI Leaders and organizers meet with Dallas Police Commanders, including then-chief U. Renee Hall, following a meeting as DPD Headquarters.]

The Post-Pandemic Path Ahead, Catholic Campaign for Human Development