VISD to consider permanent tax exemption on freeport goods
March 21, 2012 at 4:04 p.m.
Updated March 20, 2012 at 10:21 p.m.
The Victoria school board, at its regular meeting Thursday, will consider adopting a permanent tax exemption aimed at attracting manufacturing companies to the area.
The tax break would allow companies a pass on paying taxes for freeport goods, which come into and leave the state within 175 days.
With the city and county having already approved freeport exemptions, Dale Fowler, president of the Victoria Economic Development Corporation, said a school board approval could make Victoria a "triple freeport community."
"That's kind of a big buzz word in our industry," he said. "That sends a signal to any new companies that this community embraces manufacturing and would like more."
If the school board passes the resolution, the district could come up short of funds for the first year after adopting the freeport exemption. After that, the tax base will be factored into school finance calculations, and any otherwise lost revenue would be compensated by the state.
To alleviate the first-year pinch, Fowler has secured contracts with some of Victoria's companies most likely to benefit from the freeport exemption. The companies - Invista, Berry Plastics, Valerus Compression Services and Dragon Rig Sales and Service - have agreed to pay the first year of freeport taxes to cover any of the school's lost revenue. If this year's taxes, which are due April 30, don't end up accounting completely for VISD's lost revenue, Caterpillar has also agreed to make up the difference, Fowler said.
"It keeps the school district completely whole for this first year. The second year, it won't make a difference to them, and then our local companies can continue to receive this benefit going further," Fowler said.
About 165 school districts in Texas have adopted a freeport tax exemption, which in 1989 was added as a state constitutional amendment to encourage economic growth, Fowler said.
Freeport taxes are a frequent topic of interest for potential industrial clients, with the total inventory in Victoria reaching about $55 million, Fowler added.
"My personal opinion is freeport's a win-win for school districts and local industry," said VISD Board President Tami Keeling.
If the resolution is passed, the district cannot return the tax in the future.
The Bloomington school board at its Monday meeting passed the freeport tax exemption though there are no businesses with freeport goods in its jurisdiction.
At its Thursday meeting, the board also will hear an update on the leadership profile for the superintendent search. The profile is being created based on interviews with VISD faculty and staff, community focus groups and a public survey, which can be found online at www.visd.com.