LNG TAX ABATEMENTS MORE THAN OFFSET ANY NEW JOBS

"Annova said it plans to spend $2.9 billion over three or four years on construction of an LNG plant in three stages. For every dollar of that investment, the project would support $1.32 of total economic output and 38 cents of income for Texas employees, the company claims. First-stage capital investment would total more than $1.6 billion, according to Annova." Brownsville Herald, April 29, 2015

By Juan Montoya
On April 9, the Cameron County Commissioners Court agreed to enter into contract negotiations with Houston-based Annova LNG over the company’s request for a 100-percent property tax abatement from the county as an economic development incentive to build a liquefied natural gas export terminal at the Port of Brownsville.
All environmental considerations aside, even if the plants are approved and come in to do business, they are also asking the taxpayers fo the poorest region in the country to subsidize them by granting them a 100 percent tax abatement.
County officials say that is standard procedure that large companies often seek from the communities where they want to locate. They say that they would "crunch" the numbers" to see whether the abatements would be granted.
But if one looks at the taxing entities involved in considering tax abatements, it is easy to see that Cameron County's tax rate is one of the lowest involved (0.399291 per $100 valuation). Others that may be asked to forego the tax income from the billions promised to be brought here by Annova are the Port of Brownsville (0.042000 per $100 valuation), the Point Isabel Independent School District (1.081634 per $100 valuation) and (depending on the site) several drainage districts.
For years, the fact that the PI ISD is the taxing entity for major industry at the port has rankled Brownsville residents. With Brownsville putting up with dangerous traffic, spills of hazardous materials, and safety considerations, many think that the Brownsville schools should collect the taxes at industrial sites there. Unfortunately, none of the state legislators have wanted to carry the ball on that question.
The requested tax abatement, which would apply both to real and personal property, would start in tax year 2020 and last for 10 years. Annova and two other LNG firms leasing industrially zoned plots at the Port of Brownsville (NextDecade LNG and Texas LNG) recently began the Federal Energy Regulatory Commission permitting process, which may take as long as two years to complete.

Eddie Campirano, port director and CEO, told the local daily that Annova’s request isn’t unusual for a large company looking to move into an area. Bass Pro Shop in Harlingen and SpaceX near Brownsville both were landed partly through financial incentives, he said.

“I’m sure there are going to be a lot of comparisons to SpaceX,” Campirano said.

Exelon spokesman Bill Harris called the abatement request “just a normal part of doing business.”
Now, we always get into trouble when we try to do math, but we asked tax mavens at Cameron County Tax Assessor-Collector Tony Yzaguirre's office to crunch some numbers for us to determine the impact on the entities.

If approved, the 100 percent tax abatement on a conservative valuation of $ 1 billion for the PI ISD would be: $10,816,340 a year. Multiply that times 10 and you have the PI ISD agreeing to forego
$108,163,400 in school taxes. Since all four plants LNG are in the PI ISD and will also ask for tax abatements, you do the math. even if they bring in 100 jobs at $70,000 each (doubtful), are the abatements worth it? 
That's just the PI ISD, the biggest taxing entity. But doubtless the LNG folks will be knocking on the doors of other entities to get their 100 percent tax abatements like South Texas ISD (0.049200 pr $100 valuation), the Brownsville Cameron County Emergency District (0.100000), the Texas Southmost College (0.164094) and of course, the Brownsville Navigation District (0.042000). A penny here and a half penny there times $1 billion adds up to real money doesn't it?  

There is one more thing that reader can remember.
When Titan Tire came to Brownsville, it also asked for tax abatements and the county acquiesced, only to have the project implode after it was determined that the owners had opened up shop here to break a union at their home site.
When Titan closed shop, the entities that granted it the tax abatements were left holding the bag, all except for the Los Fresnos ISD. They said no, and refused to give the abatement.
 Will PI school and the other entities forego millions in property, inventory and equipment tax income to please the LNG companies?