For well over a decade, Texas schools have been plagued by funding shortages, teacher retention problems, overloaded classrooms and infrastructure maintenance backlogs — in part because of a tax giveaway program that robbed school coffers to deliver billions of dollars in payouts to major oil and gas companies. The old program, known as Chapter 313, provided enormous tax breaks to build everything from liquid natural gas facilities to plastics plants. Amid broad bipartisan recognition of the damaging effect of Chapter 313 on state school funding, and the dubious claims of beneficiaries with regard to their need for tax breaks, the Texas Legislature allowed the program to expire at the end of 2022. But that didn’t stop oil and gas.
Industry lobbyists applied steady pressure for the Legislature to create a replacement — and fast. In March, Republican lawmakers rallied to quickly draft a zombie version of Chapter 313, now renamed Chapter 403, with most of the familiar problems repeated from the old program. Even though semiconductor fabricators were the target of the original Chapter 313 legislation, fossil fuel-related industries that were already in Texas were its major financial beneficiaries, and it was mainly oil and gas lobbyists that led the campaign to replace it. Buoyed by their successful effort to shut down renewal of Chapter 313, activists lobbied hard against the new program. Ultimately, they failed, but their determined effort to educate legislators about the harms caused by school-tax-based incentive programs did result in major reforms, which will significantly curb tax giveaways to industry — if the state enforces them.
