Texas tax give-back to oil companies set to further drain school budget

Public school districts in Texas as in Colorado this year have filed suit to stop the cash-strapped state from raiding the education budget. Coloradans will be interested in the latest developments in the Lone Star state. A proposed series of tax credits for the oil industry would drain even more funds from the schools there. The credits would give back roughly $150 million to oil refinery operators, part of a “business friendly” policy championed by GOP governor-turned-presidential-candidate Rick Perry. Adding insult to injury, the state is asking certain school districts to give back money they’ve already received in order to fund the oil-company give-backs.

The Texas school budget has been stripped of $4 billion this year. That’s the backdrop against which the Texas Commission on Environmental Quality will be considering the oil company requests for tax credits to recoup for the cost of refinery equipment installed to lower harmful emissions. The AP reports the credits in question go back to payments made five years ago and, if awarded, are sure to draw out similar requests from additional oil company refineries operating in the state.

The Texas Commission on Environmental Quality is evaluating 16 requests for the refund, which concerns a piece of pollution-controlling equipment. If granted, the refund total for those requests could add up to more than $135 million, according to county tax data and application documents analyzed by The Associated Press. What’s more, agency documents show that if the commission grants the requests, at least 12 other refineries that have not sought a refund also could qualify.

The three-person commission last year expressed some support for the refund, prompting concern the panel is preparing to side with the industry in the middle of a budget crisis.

Should the commission approve the request, it would fall in line with Perry’s argument on the GOP presidential campaign trail that by being friendly to business he has attracted businesses and jobs to Texas while other states suffered.

Local officials have suggested for years that it’s time to rein in the tax credit for emissions controls, established by the Texas Legislature nearly 20 years ago. But with the state cutting deeper each legislative session to make ends meet, the monster credits face greater criticism today. As the AP reports:

“We were already cut at the knees as it is, but more cuts? It’s appalling,” said Patricia Gonzales, a single mother of 13-year-old twins at Park View Intermediate School in Pasadena, a refinery town just south of Houston.

David Hodgins, a consultant and attorney for the Texas Association of School Administrators, told the AP that all the districts in the state could share the burden if the tax credits are approved, but that school districts close to the refineries will be hit hardest.

Valero said no one – not the refinery owners, municipalities, commission or appraisal districts – knows how much the industry could get if a refund is granted.

“It’s not going to be a disaster,” said Day, the company spokesman.

“I guarantee you, it’s not a surprise to the school districts,” he added. “Yes, they spent the money, yes we’re asking for an abatement on our pollution control equipment … but this is really no different than a homeowner appealing their property tax, just on a larger scale.”

There’s no deadline for the decision from the TCEQ commissioners, all of whom were appointed by Gov. Rick Perry, leaving school districts to plan for the future without knowing how much they may have to pay back to Valero, or any other refinery operators that may come forward for a refund.

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