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School property tax part of business economic incentives

Feb. 5, 2017 at 10:34 p.m.
Updated Feb. 6, 2017 at 6 a.m.

Dale Fowler

Dale Fowler

DALE FOWLER

School Property Tax Value Limitation, or Chapter 313 as it is often called, is the most significant incentive a Texas community can offer to help attract new, high-capital industrial investments.

As with most economic development incentives in Texas, it has been and should continue to be a local decision.

Most states in our nation collect a personal income tax to help fund public education. Not Texas; we use property tax to fund public education.

Most Texans are happy about not paying a state income tax, but we also recognize that a strong public school system is important, so we choose to fund it through property tax.

Texas' property tax system presents a challenge when competing with other states for capital-intensive projects such as chemical plants or high-tech and advanced manufacturing.

Attracting new investments is highly competitive, and to remain on the short list of sites being considered for these high-capital projects, communities in Texas must often use some combination of economic development incentives. Companies will compare total operating costs as well as construction costs between each location they are considering.

Tax incentives, such as Chapter 313, help level the economic development playing field among the states so other Texas community attributes can help win the project.

Chapter 313 of the Texas Tax Code allows local school districts to offer a limitation on the taxable value of certain new investment projects for up to 10 years. The amount of the limitation depends on the size of the school district and its tax base. These limitation values are published on the state comptroller's web page. The value limitation always allows for the district to initially receive substantial new tax base and simply delays the time for the full value to come on the tax rolls.

Chapter 313 program applications are extensive and are made public on the State Comptroller of Public Accounts' website. Projects being considered for tax value limitation must substantiate that receiving the Chapter 313 incentive was a determining factor in their decision to invest in Texas.

The Comptroller must closely evaluate the application and determine that it meets the required criteria. The local school district makes the final decision to grant the limitation by entering into an agreement.

As I've stated in previous columns, economic development is a team sport. It will take the whole community working together to make one of these high-capital investment projects a reality.

Tax Value Limitation agreements allow our Texas school districts to be major partners in the competitive economic development process along with city, county and other local governing entities. I do believe our community will have future opportunities, as we have in the past, to bring new investment and new high-quality jobs to our region.

The VEDC's mission is to raise awareness of Victoria to industrial companies so they may give our area a sincere evaluation and consideration for their project, but it will be up to all of us pulling together to get the job done and have them make their investments here.

Dale Fowler is the president of the Victoria Economic Development Corporation. Contact him at 361-485-3190 or email dalefowler@victoriaedc.com.


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