AUSTIN — If you’re a working-class Austinite, local government officials will suffocate you with taxes. But if you’re a multibillion-dollar corporation looking to come to town, county officials are suddenly scrambling to roll out the red carpet.
This week, the Travis County commissioners approved offering exclusive perks and favors to electric vehicle company Tesla, which is considering leaving California to build a “gigafactory” in southeast Austin.
The perks? The county won’t require Tesla to pay full property taxes, unlike the rest of working citizens.
Specifically, the county would rebate at least 70 percent—and as much as 80 percent—of Tesla’s taxes for at least 10 years, meaning Tesla would not have to pay a minimum of $14.7 million in taxes over the next decade.
Four of five county commissioners approved the special perk, with one abstaining.
Additionally, last week the Del Valle school board—the school district where Tesla is considering locating—also approved changing tax rules to help Tesla. 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 capped Tesla’s property value at $80 million for 10 years, where otherwise it would be $600 million on average, according to a calculation by consultants. The district’s special rule for Tesla means the company won’t have to pay nearly $50 million in taxes to the school district over 10 years.
Tesla has not announced when it will decide where to relocate.
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.
Indeed, University of Texas government professor Nathan Jensen, a critic and studier of these unjust taxpayer-funded special deals, 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 this week.
Meanwhile, local officials in Travis County are not only harming normal citizens by taking more cash, 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.
And amid all of that, with countless citizens now struggling to just afford food and rent, local officials are actually now considering raising taxes again this year.
That is, of course, unless you’re Tesla.