Gov. Greg Abbott boasted about the strength of the state’s economy on Friday while signaling support for incentives that attract businesses to Texas by cutting the taxable property value for school districts.
During a panel talk in San Antonio on Friday, Abbott said he backs renewing Chapter 313 agreements, an economic development incentive program that could mean millions in tax savings for companies that move to Texas.
The program ended Dec. 31 with 633 active agreements on the books, according to the Texas Comptroller’s Office. None are in Bexar County.
During the 88th legislative session, that could change as the state’s lawmakers look to either revive the program or let it fade away.
Without such incentives, the state could lose out on some of the most consequential economic development opportunities in the U.S., Abbott said.
Speaking to about 300 business professionals and others at a luncheon sponsored by the San Antonio Chamber of Commerce and Greater:SATX, the governor said Texas’ economy is ranked as the ninth largest in the world in terms of gross domestic product.
But it is competing with states like New York, Florida and Tennessee for business. And, “Texas doesn’t like to lose,” he said.
Last year, the semiconductor chip manufacturer selected Ohio over Texas for a new $20 billion plant because that state offered a better incentive package, he said.
To remain competitive, the state must have meaningful economic incentive programs like Chapter 313, he said. “There are good reasons why 313 needs to be changed,” he said. But without it, other states “will eat our lunch.”
Critics of the incentive program say one problem with Chapter 313 is that it benefits only wind energy farms and petrochemical companies, industries that are geographically bound anyway.
Abbott was joined on stage by Jenna Saucedo-Herrera, president and CEO of the regional economic partnership, Greater:SATX.
She said that while incentives aren’t the only factor in increasing economic development, such programs are critical to success.
“We don’t want to just compete,” she said. “As the governor said, we want to win. We’ve got to continue to improve to remain competitive.”
Abbott also pointed to the need for continued improvement in the state’s infrastructure to ensure economic development in the state and in San Antonio.
The massive liquefied natural gas export terminal in Corpus Christi Bay is becoming one of the largest ports in the world, turning Interstate 37 into an energy superhighway. “So San Antonio’s already in a choke point,” Abbott said.
The governor spoke of finding ways to provide property tax relief for both homeowners and businesses during the upcoming legislative session.
Texas has the largest budget surplus of any state, he said, and some of those funds should be used to cut property taxes.
“In each of our proposed budgets, we’ve dedicated $15 billion to cut property taxes,” Abbott said. “Now we’re working on what are the correct approaches to reduce those property taxes. And one way is … compressing what your school property tax bill is,” and for the state to provide more money to schools.
He also supports a business personal property tax exemption for the first $100,000 that would help small businesses thrive.
Abbott said Texas is well-positioned to weather a potential recession, according to reports from the Federal Reserve Bank of Dallas.
The state’s diverse industry and revenue from the oil and gas industry help to maintain its strong economy. But that may not be enough, he said.
“We need to keep [up] our energy and our aggression knowing that just like in every part of the business world or sports world or whatever, there are competitors who want to unseat us,” Abbott said. “We need to maintain our aggression and focus to make sure that we will be the leading economy in the United States.”
