Opinion: A True Public Dialogue Is Needed About Taxpayer-Funded Corporate Giveaways

We need the mayor and City Council to do better when using public tax dollars to subsidize private corporations. At its regular meeting on September 21, the Austin City Council unanimously approved a $1 million taxpayer-funded incentive deal (Chapter 380 agreement) with Dutch semiconductor manufacturing firm NXP in exchange for the promise of 53 new jobs.

From its introduction at a September 12 work session to the final vote, taxpayers had less than a week and a half to scrutinize the first city agreement in five years. There was a clear lack of attention to public dialogue, sufficient time and engagement of community and taxpayers who foot the bill for the company's tax abatement.

For the past 15 years, Central Texas Interfaith worked with allies and city leaders to develop a set of criteria for city Chapter 380 agreements that require jobs [to] meet: 1) city living wage standard, 2) health benefits, 3) local hiring, 4) career advancement, and 5) worker safety requirements. Compliance with criteria needs to be enforceable and apply to both construction jobs and permanent jobs.

When NXP approached Austin ISD in 2022 for a major tax abatement under another state subsidy program, Chapter 313, CTI successfully opposed the deal because we oppose all school-based tax abatements. During the AISD debate we said NXP would do better to pursue city or county incentives because it did not take potential money from schools, and stronger safeguards for jobs created were written into policy. In the 2021 Texas legislative session, CTI and Texas IAF stopped the reauthorization of Chapter 313, which took $1 billion a year in potential school funding and gave it to corporations in tax breaks. In the 2023 session we forced major reforms to Chapter 313's replacement, House Bill 5.

We don't like taxpayer subsidies to private corporations but have not opposed them at city and county levels provided they live up to high community standards. However, these incentives are still paid for with public tax dollars and deserve time and attention from taxpayers and citizens to get their questions answered and ensure their investment is worth the cost.

Attempts by CTI leaders and other citizens to get answers have been largely ignored. For reasons that are not clear, City Council did a rush job in approving the agreement.

Any engagement happened almost exclusively between the company and city officials. But there seemed to be no time to respond to questions from those footing the bill: the taxpayers. Hearings were perfunctory and citizen input and our call for more time to review the deal was disregarded. CTI simply wanted the proper time to ensure this deal lived up to hard-fought community standards.

Further, NXP's rational for over $1 million in city incentives is that it could leverage another $15 million in federal taxpayer dollars through the CHIPS Act, while promising a total of 53 new jobs. At a cost of over $250,000 taxpayer dollars per job created, this is even more reason to take the time to make sure we get it right. The Biden administration has made it very clear there is no local "match" required for the CHIPS Act, and any local incentives should be structured around direct community benefits and not primarily as tax breaks to one company.

Studies have repeatedly shown tax abatements are not the determining factors in companies' decisions about where to locate or whether to expand. Governments that give incentives need to make sure they we getting as much as possible – our money's worth.

Without meaningful public engagement, we must decide whether we need to oppose all Chapter 380 incentives outright, or whether we should follow the Council's lead in meeting only with the company. Or we can have a true public dialogue, which is what the mayor and Council owe taxpayers.

The Rev. Michael Floyd (All Saints’ Episcopal Church) and Fannie Akingbala (Ebenezer Baptist Church) are leaders with Central Texas Interfaith, formerly known as Austin Interfaith.