Texas House Pushes to Revive Corporate Welfare Program Despite Bipartisan Opposition

April 12, 2023
TFR Staff
88th Legislative Session, Corporate Welfare, Dade Phelan, Property Tax, Todd Hunter

In a year when taxpayers are barely hanging on and dealing with record-high inflation, rising energy costs, and historically high property taxes, the Legislature has opted to act decisively. They have wasted no time pushing for multinational, billion-dollar corporations to get hundreds of millions more of your hard-earned tax dollars.

Republican State Rep. Todd Hunter’s (Corpus Christi) House Bill 5 was laid out in the House Ways and Means Committee on Monday, marking the first major step toward reviving the largest corporate welfare program in Texas, which was forced to expire last year after failed efforts of renewal. There was a major push last legislative session to save the corrupt corporate welfare program, but it faced an uphill battle due to it being opposed by both political parties.

The Texas Legislature is comprised of only lawmakers who subscribe to the Republican or Democrat parties. Both of these party platforms express opposition to corporate welfare.

The Texas GOP platform states:

“Plank 94: Property Tax Abatements: We support repealing Tax Code Chapter 312 county and municipal property tax abatements, and we oppose reintroducing school property tax abatements, formerly known as Chapter 313.”

The Texas Democratic Party platform states:

“Eliminate tax loopholes and unproductive special breaks to simplify the tax system and provide revenue for essential services.”

That same platform continues:

“Prohibit ‘corporate welfare’ incentives that pit states and communities against each other.”

In spite of both this and the lack of renewal last legislative session, the uniparty in Austin has decided to ignore Texas taxpayers and instead cater to corporate lobbyists and business interests. The Texas House of Representatives is on track to give lackluster property tax relief to homeowners and, in the same breath, advocate to revive the largest corporate welfare program in Texas that will burden those same taxpayers. None dare call it a Chapter 313 abatement though, as many witnesses were corrected when they tried to compare the new corporate welfare program to the now expired program.

Elected leadership has gone to great lengths to deceive voters, insisting it is not 313 but merely a new “economic incentive” package to help businesses relocate to Texas. Despite the euphemism and the spin, they cannot hide what this program is: corporate welfare, or a reverse Robin Hood system where government steals from the poor and gives to the rich.

Moreover, leadership in the Texas House has decided to ignore recent research on the effectiveness of the corporate welfare program—specifically, a 2018 UT study showed that only 15% of 313 recipients even considered the program as a factor for locating to Texas. There was a massive amount of opposition to the program in committee on Monday.

As an example, Dick Lavine, the senior fiscal analyst from Every Texan, a left-leaning economic think tank, had many valid criticisms of the legislation in his testimony opposing the measure.

He opened by stating, “In my opinion, HB 5 is like 313 except it has fewer jobs, lower wages, less accountability and it is more expensive.” He also noted that there is no audit in the bill; even though the 313 program had a weak audit provision, this one has none. He continued to note that there is also no sunset provision, meaning the program would go on forever and not be subjected to a sunset review to potentially end the program.

The House has certainly outdone itself with HB 5. They have come up with a far worse corporate welfare program, with no accountability, that spends more money and is not able to be sunsetted. The bill was left pending in committee on Monday. As a legislative priority of House Speaker Dade Phelan, however, we expect to see a vote on HB 5 within the next week or so in committee. It is important to note that the bill has more than 50 co-authors. The question is: Does it have the votes to get it across the finish line this year?

What Is Next?

As always, Texans for Fiscal Responsibility (TFR) will keep you up to date on HB 5 and other legislation as it moves along the process; when it makes it to the floor, we will absolutely be opposing the bill on our Fiscal Responsibility Index.

If you are concerned that the Texas House is choosing to give your tax money to woke corporations while giving you a minimal amount in property tax relief, you should contact your lawmaker to let them know before the legislation makes it to a floor vote.

Concerned taxpayers may contact their state lawmaker here.