AUSTIN — While local government officials are suffocating working-class Austinites with taxes, they’re rolling out the red carpet for a multibillion-dollar corporation.
On Wednesday, electric vehicle company Tesla announced it would be building a “gigafactory” in southeast Austin and is expected to employ 5,000 people.
While the new jobs and economic opportunities are certainly worth celebrating, local government officials tainted it by making an unjust deal with the company, giving them tens of millions in special perks and exclusive favors—and forcing working citizens to pay for it.
Specifically, the Travis County commissioners won’t require Tesla to pay full property taxes, unlike the rest of the county’s working citizens. The county agreed to rebate at least 70 percent—and as much as 80 percent—of Tesla’s taxes for at least 10 years, meaning Tesla would save a minimum of $14.7 million over the next decade.
Additionally, the Del Valle school board—the school district where Tesla is locating—also approved changing tax rules to benefit the company. The board capped the potential Tesla factory’s taxable property value, meaning the school district won’t keep taking more money from the company year-over-year—much unlike the rules for normal citizens, where government can raise their property values, and subsequent tax bills, without a total limit.
The school board’s special rules for Tesla will reduce their taxes by nearly $50 million over 10 years.
Sadly, local officials are not treating normal citizens with such fawning favor. Travis County, run by Democrats, is charging the average homeowner roughly $400 more annually on their tax bill compared to 11 years ago. A report by the United Way revealed an astonishing 42 percent of Austin families are now struggling to make ends meet, and raising a family of four in Travis County costs a whopping $13,000 more than the statewide average—a cost driven higher every year when officials keep taking more taxes.
And when officials use citizens’ cash to give hand-picked companies the “golden child” treatment, not only is it unjust, but the favors are laughably unnecessary. In the deal for Tesla, whose revenue last year was $24 billion, getting a $64 million boost spread out over a decade is like getting a $13 bonus per year on your $50,000 salary.
Just ask Toyota and Mazda if the favors are truly what attracts them to a city; those companies recently turned down an extra $700 million in perks from North Carolina to build in Alabama instead.
University of Texas government professor Nathan Jensen, a critic and studier of these unjust taxpayer-funded special deals, said the Tesla favors are “a bad investment of taxpayer money as small businesses close in our community.” He said research shows that in at least three-quarters of these deals, the company would have still built in the area without the perks.
“These (incentive agreements) are generally very bad policy, and it is a particularly bad idea for low wage jobs,” Jensen said last week.
Numerous citizens testified against the deals at recent Travis County and Del Valle school board meetings, with one saying that to “hand over millions” to the multibillion-dollar corporate behemoth is “simply ridiculous.”
Luckily for citizens in other parts of the state, a spokesperson for Gov. Greg Abbott says Tesla did not receive any money from the Texas Enterprise Fund, the pool of citizens’ money the state uses on corporate special deals.
But locally, officials in Travis County are not only harming normal citizens by taking more cash and giving it as favors to hand-picked corporations, but they’ve forced at least 132,000 Austinites out of work in the past several months by shutting down the city, blocking citizens from providing income for their families.
If only local officials treated citizens like they do Tesla.