Though it wasn’t renewed by the state Legislature in 2021, Gov. Greg Abbott is teasing the potential return of a controversial corporate welfare program despite bipartisan opposition.
The Chapter 313 program, which expired at the end of 2022, allowed school districts to offer large tax breaks for 10 years to unreliable energy and other businesses—including wind farms that famously failed Texans during the winter storm of 2021. The tax breaks come at no loss to the school districts. Instead, the state supplements the lost revenue to the districts from sales taxes and other state-collected taxes.
The program has drawn criticism from the right and left; both the Republican Party of Texas and the Democrat Party of Texas call for the abolition of Chapter 313 abatements in their party platforms.
Ever since the program wasn’t granted an extension by the Legislature, there has been growing talk in the Capitol about the program being granted a second life. House Speaker Dade Phelan has repeatedly indicated his support for “a version of 313s that are more transparent, with more accountability and oversight.”
Now, Gov. Abbott is expressing his support for a new iteration of the program.
Abbott first hinted at this during his State of the State address last week, where he said “local communities need new economic developments tools this session,” though he did not make the issue one of his emergency priorities for the Legislature.
He expanded on his comments more during a recent speech at the Greater Arlington Chamber of Commerce.
“Chapter 313 is gone, and that said, there is a desire in the Capitol to make sure Texas does remain No. 1 for economic development,” said Abbott, adding that his office and other lawmakers were working to “ensure that we will have economic development tools going forward that may not exactly replicate 313.”
Some argue that, despite the rebranding effort, the program should not be resurrected.
“Whether you call it a Chapter 313 or not, the government being in the business of picking winners and losers under the guise of economic incentives in a free enterprise system is corporate welfare,” said Jeramy Kitchen, the executive director of Texans for Fiscal Responsibility. “To make matters worse, at a time in which individual property taxpayers are reeling from near-record inflation, higher grocery bills, and ever-increasing property tax burdens, asking them to continue to bear the brunt of an exemption afforded to select businesses but not for them is immoral.”
Texas Scorecard recently highlighted the Chapter 313 program in an investigative series: The Texas Mafia.
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