Grimes County has approved a proposed SpaceX manufacturing facility.
Yet the company says it is still waiting for “needed” tax breaks from local school districts to proceed with construction.
Tesla, SpaceX’s sister company, received a similar tax break from Travis County’s Del Valle ISD in 2020.
The proposed manufacturing facility will focus on fulfilling the company’s new demand for chips that are usually sourced from Taiwan. These chips will be used in solar-powered AI satellites that Elon Musk and SpaceX CFO Brett Johnsen laid out a vision for this past week on X.
“The satellites would be powered entirely by the sun, cooled by the vacuum of space, and connected to users on the ground through SpaceX’s existing Starlink network,” KBTX reported on the project.
However, Musk has said the development of the satellites is not a promise, but is something that “we are going to try to do and think we probably can do.”
SpaceX’s proposed facility will cost $119 billion in total, which will be spread across four phases and encompass more than 22,000 acres.
Located in Grimes County, the proposed chip facility has been approved by the county to be classified as a reinvestment zone, but SpaceX claims for plans to continue to move forward with the project, a tax break is needed from the local school district.
According to KBTX, SpaceX has filed eight applications across two different school districts, Iola ISD and Anderson-Shiro CISD, requesting that the M&O property tax be frozen at 50 percent of appraised value for ten years per project phase, with the state funding the difference through the JETI (Jobs, Energy, Technology and Innovation) program.
In its applications, SpaceX cites that the tax “represents the single largest recurring cost differential between Texas and competing jurisdictions,” arguing that those jurisdictions would provide a better after-tax-return. The application specifically mentions Arizona as a possible alternative.
“If Texas is going to continue to be an economic leader into the future, while also protecting all taxpayers, we must move to eliminate property taxes. SpaceX even noted in its filings that ‘property tax exposure—particularly school district M&O taxes—represents the single largest recurring cost differential between Texas and competing jurisdictions,’” Texans for Fiscal Responsibility President Andrew McVeigh told Texas Scorecard.
“If it’s true for SpaceX, it’s true for homeowners and other business owners as well.”
Currently, plans show that the Phase 1 construction of the facility would start in 2026, but none of the required permits or applications have been submitted.
The formal recommendation from the comptroller’s office for the project is expected around June 15. After the recommendation is issued, the governor has 30 days to approve or decline, and the school districts have 30 days to hold a public hearing and vote.
For the project to receive approval, the governor and both school districts must agree.
