Where Did All the Money Go? School Property Tax Abatements under HB 1200 (2001)

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Dick Lavine /(512) 320-0222 x 101

April 10, 2007

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School districts may grant property tax abatements to certain businesses that make the required level of investment and meet certain wage and benefit requirements. The cost of the property tax revenue lost to these abatements is borne by the state through the school finance system and is expected to reduce revenue to the Foundation School Program by more than $500 million in the 2010-11 biennium – enough to fund a pay increase of nearly $1,000 for all Texas classroom teachers! Several bills would expand the scope of the abatement program or severely weaken its current wage requirements, increasing its cost to the state. The tax abatement program is due to expire at the end of 2007. The Legislature should re-authorize the abatement program for only two years and perform a comprehensive review of these abatements during the interim.