Texas Governor Greg Abbott has announced that the state will commence accepting applications for the Texas Jobs, Energy, Technology, and Innovation (JETI) program. This initiative was established by the Texas Legislature in 2023 as a newer version of its school property tax abatement scheme for large businesses.
According to a press release from the Office of the Texas Governor, JETI's objective is "to attract large, capital-intensive economic development projects that bring new capital investment and create new, good-paying jobs in Texas communities." Abbott contends that this program is essential because Texas "cannot be complacent as we now compete both nationally and globally in industry sectors critical for growth tomorrow."
However, controversy surrounded the state's previous school property tax abatement program which ended in 2022. Luis Figueroa, during an interview with the Lone Star Standard, claimed that the expired program "was abused and had gone way beyond the initial intent, which was an incentive for employers to come into the state and set up a business." Figueroa serves as the legislative and policy director of social policy think tank Every Texan.
Another issue raised by taxpayer advocates was Chapter 313's significant reduction of property value on tax rolls for school districts. For example, according to the 2023 Report of the Texas Economic Development Act, it was reported by the Texas comptroller that $67 billion worth of property was removed from tax rolls due to this program in 2021. Consequently, both state and school districts lost $1.7 billion in revenue that year.
Based on Abbott's announcement detailing how these tax abatements would operate under JETI, it appears this new program might encounter similar challenges as those faced by its predecessor - Chapter 313. According to his news release, JETI permits approved companies a decade-long agreement capping their school district's maintenance and operations (M&O) tax appraised value at 50%, provided they meet specific employment and investment thresholds. Projects located in designated "Opportunity Zones" are eligible for an additional 25% reduction in taxable value.
Abbott, who has served as Texas governor since 2015, has consistently backed property tax abatement programs during his tenure. He asserts that these initiatives "will create good-paying jobs for generations to come." Abbott signed the bill establishing the JETI program after it was forwarded to him by the Legislature.
