After allowing a well-liked corporate tax incentive program to expire last year, Governor Greg Abbott on Wednesday sought to reassure business leaders that state lawmakers will take action during this legislative session to boost the state’s economic development tools.
Additionally, he claimed that Texas was already experiencing the effects of losing the program after recently losing out to New York on a “major” corporate project.
Abbott gave what appeared to be his most in-depth public remarks to date when he spoke to the Greater Arlington Chamber of Commerce about Texas’s economic development in the wake of the termination of the so-called Chapter 313 program. The political sensitivity of the subject was acknowledged by Abbott by referring to it as the “elephant in the room.”
Abbott Is Confident About State Remaining No. 1 In Economic Development
Abbott stated, “Chapter 313 is no longer in effect, but that doesn’t change the fact that there is a desire in the Capitol to ensure Texas does remain No. 1 for economic development. And that said, we’re working on — and others in the Capitol are working on — to ensure that we will have economic development tools moving forward that may not exactly replicate 313 but will keep Texas No. 1 for economic development.
Although Abbott did not specify what those new instruments would be, his remarks are encouraging to business executives who are attempting to revive Chapter 313 in some way.
The program’s goal was to entice big businesses to Texas by lowering their property taxes in the local school districts, but it was dogged by accusations of “corporate welfare” from both sides of the political aisle. For the first time in the program’s 20-year history, legislators chose not to renew it in 2021 when the state Senate opted not to examine a bill extending it.
In his State of the State address on Thursday, Abbott made a passing reference to the program’s controversy by remarking that “local communities need fresh economic development tools this session.”
His comments in Arlington and that one place him in line with state House Speaker Dade Phelan, a Republican from Beaumont who favors a Chapter 313 rebirth. Lt. Gov. Dan Patrick, who oversees the Senate and boasted last month that he “killed” Chapter 313 in 2021 because it “had been overused,” stands in their way.
Abbott said on Wednesday that Micron’s recent decision to establish a new computer chip facility in upstate New York rather than Texas was influenced by the expiration of Chapter 313. It caused Texas to “lose to one of the worst states for business in America,” according to Abbott.
Wednesday, Abbott showed a clear understanding of the tarnished reputation of the show. He humorously advised Arlington business leaders to avoid bringing up the number 313 in any conversations with lawmakers this session. It gives folks a terrible taste in their mouths.
In a letter to lawmakers last week, more than 150 business organizations—among them the president of the Greater Arlington Chamber of Commerce—called for a “modern, transparent, and responsible economic development program.” The phrase Chapter 313 was not used.
The last day the comptroller’s office could enroll corporations in the program was December 31, 2022, which marked the official end of the program. In the closing months of the program, the office was inundated with applications, and two renewable energy corporations sued after their applications were rejected due to the late rush. The Texas Supreme Court decided against getting involved.
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