Tuesday, February 14, 2017


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(The Cameron County Commissioners Court has before it several applications for property taxes to be abated at a varying degree for the first 10 years of operations at the Port of Brownsville. The amounts of taxes that the LNGs are asking local municipalities and school districts to be forgiven amounts to $100s of millions. The Beaumont Enterprise editorial that appeared in the Brownsville Herald this morning is the first sane piece of opinion we've seen on this matter. We reprint it  for the consideration of out three readers.)

From The Beaumont Enterprise
With so many petrochemical plants in Southeast Texas, this region's state representatives and senators could do something truly significant for their constituents in this session of the Legislature: Close the loophole that allows some large industrial plants to drive their taxable valuation below true market value. If they do that, they will help average homeowners and small businesses.

The math is clear on this issue. When large petrochemical plants pay fewer tax dollars than they should, that puts a crunch on cities, counties and school districts. They can reduce services like road maintenance or law enforcement, or they can raise tax rates for average Joes and Janes. Neither option is attractive.

We appreciate our petrochemical plants and the jobs and tax revenues they provide. Not every plant takes advantage of this loophole, and some make generous charitable contributions as well. We don't want them overtaxed ... or undertaxed. We want them paying taxes based on the fair market value of their properties, just like other homeowners and businesses.

Thanks to the unintended consequences of a bill passed in the waning days of the 1989 session, big industries can pay less than they should.

Basically, if they find a comparable plant elsewhere with a lower valuation, they can use that to try to reduce their tax value. Incredibly, they can even do this with plants in other states. It's a race to the bottom that produces "a lack of uniformity and inequality," in the words of Jefferson County Judge Jeff Branick.

Local plants usually are treated well by county commissioners and city councils. They receive generous tax abatement deals most of the time they seek them, sometimes on expansion projects that would have happened anyway. Average homeowners and small businesses don't get those deals, and neither do they have the resources to challenge valuations so aggressively.

Nobody likes paying taxes. We're all going to use every legal means available to reduce our tax burden. But the best system is one in which we all pay our fair share. If this loophole were closed, Texas would be closer to that goal.

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