Austin Local News
Austin Considers Ending Corporate Economic Agreements
Faced with new property tax limits, the Austin City Council is considering ending some major corporate incentive agreements, known as 'Chapter 380 agreements.' The city has been scrambling to find a way to adapt to newly signed legislation that will limit cities and counties to an annual property tax increase of 3.5-percent, and among the proposals is to reconsider, and potentially end, those 380 agreements with some major corporate players.
Mayor pro tem Delia Garza is among the more vocal supporters, saying at Tuesday's work session that marginalized communites, like minorities and LGBTQ Austinites, should always come before corporate tax breaks.
"I think corporate incentives should be the very first thing we look at," Garza said.
Austin currently has eight of these agreements, including deals with Apple, Samsung, and The Domain. The agreements have led to an economic infusion of nearly $5-billion, with thousands of new jobs being created along the way.
The Domain deal has been among the more contentious debates at City Hall, with several council members having expressed their desire to end that deal on previous occasions.
Council member Kathie Tovo has been opposed to the incentives given to The Domain for quite some time.
"As we look for different sources of funding to cover our gap, that’s one of the first places I’m going to go," Tovo said.
Council's concern stems from the latest projections from the Intergovernmental Relations Office, which says, because of the new property tax law, Austin will be facing a $15-million deficit by next year, and a $51-million deficit by 2024. However, that's only if the city chooses to stay at the 3.5-percent threshold. With a simple public election, council could go well beyond that rate.
Support appears to be growing to back out of these multi-million dollar agreements as a way to save Austin's numerous social programs that are funded through tax dollars each year.